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CMS Announces New Repayment Terms for Medicare Loans to Providers During COVID-19 Pandemic

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The early repayment of the loan will now begin one year from the date of issue.

The Centers for Medicare and Medicaid Services announced amended payment terms issued under the Expedited and Advance Payment program, as required by recent actions by President Trump and Congress.

This Medicare loan program allows CMS to make advance payments to providers, which are typically used in emergency situations. Under the Continuing Credits Act 2021 and the Other Extensions Act, repayment will now begin one year from the date of issuance of the accelerated or early payment from each vendor or vendor.

CMS issued $ 106 billion in payments to healthcare providers and providers to ease the financial burden providers face while facing cash flow issues at the start of the COVID-19 pandemic.

WHAT IS THE IMPACT ?

CMS expanded the AAP program on March 28 and extended these loans to providers and vendors to address the financial burden of the pandemic. CMS has successfully paid over 22,000 Part A vendors, totaling over $ 98 billion in expedited payments. This included payments to Part A suppliers for the Part B items and services they provided.

On top of that, more than 28,000 Part B suppliers, including physicians, non-physician practitioners and durable medical equipment suppliers, have received advance payments totaling more than $ 8.5 billion.

Suppliers were required to make payments from August of this year, but with the new action, repayment will be delayed for up to a year after the payment is issued. After this first year, Medicare will automatically recover 25% of Medicare payments otherwise owed to the provider or provider for 11 months.

At the end of the 11 month period, the payback will drop to 50% for another six months. If the provider or provider is unable to repay the full PAA amount during this period – a total of 29 months – CMS will issue letters demanding repayment of any outstanding balance, subject to an interest rate of 4 %.

The letter also provides advice on how to request an extended repayment schedule for providers and providers who are experiencing financial difficulties. An ERS is a debt installment plan that allows a vendor or vendor to pay debts over a period of three years, or up to five years in extreme hardship.

Providers and providers are encouraged to contact their Medicare administrative contractor for information on how to request an ERS.

To allow even more flexibility in loan repayments, the $ 175 billion issued in vendor relief funds can be used to repay these Medicare loans. CMS will be communicating with each vendor and vendor in the coming weeks regarding repayment terms and amounts due, if any, for any expedited or prepaid payments issued.

THE BIGGEST TREND

An expedited / advance payment is a payment intended to provide the necessary funds when there is an interruption in the submission and / or processing of claims. These expedited payments may also be offered in circumstances such as national emergencies or natural disasters to speed up cash flow to healthcare providers and providers.

An extension of the deadline for hospitals to repay AAP program loans has been included in a bipartite continuous resolution in September to extend federal government funding until December 11. In October, hospitals were granted an extension to reimburse accelerated and early Medicare payments.

Hospitals received an extension from 120 days of the loan to 29 months from the date of the first payment. During the first 11 months during which these payment clearings are made, 25% of the amount is due; during the following 6 months, 50% of the amount is due; and hospitals are given 29 months from the date of the first payment before requiring full payment of the outstanding balance.

In May, Presidents Neal and Pallone raised concerns about the CMS methodology for distributing COVID-19 loans from the AAP program and the Provider Relief Fund, and called on HHS and CMS to provide in Congress more transparency.

Congress has allocated $ 100 billion in the CARES Act and $ 75 billion under the Paycheck Protection Program and the Better Healthcare for Healthcare Providers Act. These payments do not need to be refunded.

Twitter: @JELagasse
Email the author: [email protected]

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