Healthcare News
Articles, Jobs and Consultants for the Healthcare Professional
Home      View Jobs     Post Jobs     Library     Advertise     Plan Financials     About     Subscribe     Contact    
Senior Manager, Health Care Consulting Practice, Moss Adams Manager, Health Care Consulting Practice, Moss Adams

Considerations for COVID-19 Accelerated and Advance Payment (CAAP) Recoupments


By Mandy Mori
Senior Manager, Health Care Consulting Practice, Moss Adams

By Denise Stark
Manager, Health Care Consulting Practice, Moss Adams

See all this Month's Articles

Original Publish Date: December 7, 2021

The Medicare Accelerated and Advance Payments (AAP) program assists certain types of providers with advances on future claims to help with funding due to a disruption in claims submission or processing.

With the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Centers for Medicare and Medicaid Services (CMS) expanded the existing AAP program on March 28, 2020, to include a broader group of Medicare Part A providers and Part B suppliers. Changes also included added benefits as well as extended repayment terms.

Now known as COVID-19 Accelerated and Advance Payments (CAAP), the revised program aims to increase cash flow to health care providers, physicians, and suppliers during the COVID-19 public health emergency (PHE). These advances are recouped on remittances by Medicare Administrative Contractors (MACs)

Depending on when providers received the payments, they already experienced or will experience recoupments on their remittances. The following is an overview of key program details and items providers should consider with regards to the recoupments.

AAP Background

The Omnibus Budget Reconciliation Act of 1986 on October 21, 1986 first authorized the AAP program to provide so-called accelerated payments to Medicare Part A, or hospital, providers.

The program intended to expeditiously replace lost provider revenue in times of national emergencies or disasters and enable providers to remain solvent. The program extended in 1996 to include an advance payment program to Part B providers, such as doctors and other outpatient care.

The coalescence of both accelerated and advance payments sought to quickly sustain the health care ecosystem through recovery. These payments may be forgiven in part or repaid over time as health care utilization resumes.

Who Is Eligible for COVID-19 Accelerated and Advance Payments?

Per CMS, to qualify for CAAP, the provider or supplier must:

Distribution of Payments

As of December 9, 2020, CMS reported approximately $98.8 billion in accelerated payments were distributed to Part A providers and another $8.5 billion dollars advance payments to Part B suppliers.

Payments were distributed to providers as requests were processed. Applications were accepted by CMS until October 8, 2020.

Recoupment Process for Payments

Unlike Provider Relief Funds, these loans are repayable to the Medicare Trust fund.

Providers can repay the loan by contacting their MAC directly. If repaid in full, the following repayment terms don’t apply.

Recoupment Schedule

Any outstanding loans will be recouped by the MACs over 29 months. They will appear as takebacks at the provider level balance in remittances from the date of the disbursement.

The recoupment schedule is as follows:

Interest Rate

After six months recoupment at 50%, a demand letter will be issued for any remaining unpaid balances to be repaid within 30 days—with 4% interest levied from the date of the demand letter.

Recoupment will occur at 100% if a provider doesn’t repay within 30 days. This means that all Medicare payments will be withheld until the entire balance plus interest is paid in full.

Mergers, Acquisitions, and Change in Ownership

For many providers, recoupments already started.

Providers should be cognizant that mergers, acquisitions, or change in ownership during and after the PHE may increase their recoupment liability if the acquired provider also received CAAP funds.

Key Thoughts and Considerations for Providers

As of May 31, 2021, CMS reported approximately $81 billion from Part A providers and $5.9 billion from Part B providers or suppliers remain unpaid.

Providers should consider the following questions when thinking through CAAP recoupment impact:

Tips to Help Providers Mitigate the Effects of CAAP Recoupments

The following tips can help prepare for the impact of CAAP recoupments:

We’re Here to Help

For more information about CAAP considerations—including the estimation of Medicare cash shortfalls; focusing collection efforts to mitigate shortfalls in Medicare cash during the recoupment period; or options if a balance is due at the end of the 29-month period—contact your Moss Adams professional.

Additional Resources

For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources:

COVID-19 Implications resource page
COVID-19 Implications: A Complete Content Map