Congress reforms Medicare Advance Payment Program, extends repayment deadline

October 06, 2020

In September, Congress passed a “continuing resolution” to keep the federal government funded through December 11, 2020.  Included in the resolution were reforms to the Medicare Advance Payment Program, which provides up to three months of advance Medicare payments to physicians to help sustain their practices during the pandemic.

Early in the pandemic, CMS expanded this temporary loan program to increase cash flow to providers and suppliers impacted by the public health emergency. The advance payments are not grants, and providers are required to pay back the funding in a short timeline.

Under previous terms, repayment—in the form of automatic 100% reductions in new Medicare payments—began 120 days after the advance payment was issued. This means that after the 120-day are up, CMS would take 100% of the provider’s Medicare claims payments to offset the balance of the loan. These advance payments also currently carry a  10.25% interest rate if not repaid in 210 days.

The California Medical Association and American Medical Association have been urging Congress to extend the repayment timeline and reduce the interest rate so that physicians who are already suffering significant losses due to the pandemic are not placed under additional financial duress.

Under the new Congressional resolution, recoupment of advance payments will not begin until 365 after the payment was issued, with the balance due by September 2022. It also reduces the per claim recoupment amount from 100% to 25% for the first 11 months and then 50% for an additional six months. If not repaid in full by September 2022, interest payments will be imposed, however the interest rate has been lowered from 10.25% to 4%.


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