Law Eases Repayment Terms for Medicare Accelerated Payments

Today, the President signed into law a bill that includes easing of government funding rules for healthcare providers (Part A and B) to provide more time and flexibility for monetary relief to providers found cash-short due to the pandemic.

At the pandemic’s start, the Medicare accelerated payment program provided needed cash to providers for bolstering supplies and equipment to meet the anticipated COVID-19 needs. At the same time, cash-producing non-emergency and elective services were put on hold, leaving many short of funds for repayment of the loans. This law seeks to ease that strain.

Summary of Changes

  • The law extends the start of the recoupment process from 120 days to one year from the date the loan was issued
  • Payment withholding is reduced from 100% to 25% for the first 11 months and then 50% for the next 6 months
  • If full payment has not been made after 29 months from the date the loan was issued, interest will accrue on the unpaid balance
  • The law overrides the standard Medicare under/overpayment interest rate to a fixed rate of 4% 1

Please contact Fred Fisher at fred.fisher@toyonassociates.com with questions or to discuss more in-depth.

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1 CMS updates quarterly the stated interest rate for Medicare over/underpayments. The current interest rate for Q4 2020 is 9.5% per CMS Transmittal 10220.

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