Member News — Member & Society News
CMS Announces New Replayment Terms for Medicare Loans Issued During COVID-19
On October 8, 2020, the Centers for Medicare & Medicaid Services (CMS) announced new repayment terms for loans issued during the COVID-19 Public Health Emergency (PHE) under the Accelerated and Advance Payment (AAP) Program as authorized by the recently enacted Continuing Appropriations Act, 2021 and Other Extensions Act. Providers were required to start repayments in August, but now repayment will be delayed until one year after payment was issued. After that year, CMS will automatically recoup 25 percent of Medicare payments for eleven months and thereafter, recoupment will increase to 50 percent for another six months.
If a provider is unable to repay the total loan amount during this 29-month period, CMS will issue a letter requiring repayment of the outstanding balance, subject to an interest rate of four percent, and explaining how to request an Extended Repayment Schedule (ERS) for providers experiencing financial hardships. CMS initially announced that Provider Relief funds received could be used to repay the loans, but quickly reversed course clarifying that such funds cannot be used towards repayment of these Medicare loans.
Click here for CMS press release, fact sheet and FAQs on the new repayment terms.