Repayment deadlines loom for Medicare advance payment loans

August 18, 2020

In March, the Centers for Medicare and Medicaid Services (CMS) expanded eligibility for the Advanced and Accelerated Payments Program, which provides physician practices with emergency cash advances based on a their historical Medicare payments in order to provide necessary funds when there is a disruption in claim submission or processing.

This program lessened the financial hardships of providers who have faced extraordinary challenges related to the COVID-19 pandemic. CMS approved almost 24,000 applications and issued $40.4 billion in advanced payments to physicians, health professionals and other Medicare Part B suppliers to ensure they had the resources they need to combat this pandemic. Many of these loans must now be repaid, according to the payment terms.

The program was intended to be a short-term bridge to help providers stay afloat until things “returned to normal.” Unfortunately, many of these loans are coming due at a time when many practices still struggling.

Under current terms, repayment—in the form of automatic 100% reductions in new Medicare payments—begins 120 days after the advance payment was issued. This means that after the 120-day are up, CMS will take 100% of the provider’s Medicare claims payments to offset the balance of the loan. These advance payments also currently carry a  9.5% interest rate if not repaid in 210 days. The California Medical Association (CMA) and the American Medical Association have urged Congress to lower the interest rate and extend repayment timeline, so that payments don’t come due at a time when many physician practices are still struggling.

In May, the U.S. House of Representatives the Heroes Act, which included provisions that would have lowered the interest rate to 1% and given give physicians more time to repay these loans.  U.S. Senate leadership also introduced legislation to reform the Medicare Advance Payment program. However, as negotiations have broken down between the House and the Senate over the next COVID-19 response package, the widely agreed-to Medicare Advance Payment Program reforms hang in the balance as CMS is expected to start implementing repayments. 

AMA is urging President Trump to issue an Executive Order to extend the repayment timeline.  AMA is also urging CMS to do the same.  While CMS does not have the statutory authority to reduce the interest rate, they do have the authority to extend the repayment timeline and the deadlines for recoupment. 

With Congress unlikely to act before autumn, AMA has urged the president to consider executive orders to modify the program's "harsh" repayment terms. AMA is asking the president to:

  • Postpone recoupment until 365 days after the advance payment has been issued to a physician practice.
  • Reduce the per-claim recoupment amount from 100% to 25%.
  • Extend the repayment period for physicians to two years.


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