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Medicare Loan Repayment Beginning Soon

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The Medicare Accelerated and Advance Payment Program (AAP) were expanded on March 28, 2020. The Centers for Medicare & Medicaid Services (CMS) made the program available to most Medicare physicians and group practices. The AAP provided loans to medical practices suffering financial distress or disruption due to COVID-19. The loans were determined based on the practice’s history of Medicare billing. Originally, providers were to begin payments on these loans in August of 2020. However, the repayment was delayed until one year after the payment was issued to the practice. This means that repayment could begin as early as April 2021 for some providers.

Group practices that have received AAP loans have two repayment options, automatic claims recoupment and lump sum repayment. The automatic claims recoupment is the default method and involves automatically reducing the Medicare payments owed to providers to gradually recoup the amount of the loan. Beginning one year after the loan disbursement, Medicare Administrative Contractors (MACs) will reduce the payments owed to the provider by 25% for 11 months. If the loan has not been paid in full after the 11-month period, the Medicare payments will be reduced by 50% for 6 more months. Any balance remaining after that is due within 30 days or it will accrue 4% interest until it is payed off. Loans paid off before this time will not accrue interest. Providers may also repay their AAP loans by making a lump sum payment(s) to their MAC. If a group practice is interested in making lump sum payments, they should consult their MAC for details and forms to accompany the payments.

The CMS has not issued further details on the repayment process. They have not yet stated exactly when recoupment will begin. Questions should be directed to providers’ MACs at this time. 

Works Cited:  Continuing Appropriations Act, 2021 & Other Extensions Act, 5 U.S.C. §2501 (2020).

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