AAP Loan Payments Could Begin As Early As April 2021 for Some

When the COVID-19 pandemic took hold in the U.S., healthcare providers could request advanced Medicare payments through the Accelerated and Advance Payment (AAP) Program.  Through the AAP program, the Centers for Medicare & Medicaid Services (CMS) could make advancements to healthcare providers, a move typically reserved for emergency situations.  Loans were available to applicants facing financial disruption on historic Medicare billing caused by COVID-19.

Are you ready to start repaying your Medicare advance?

Repayment of these AAP loans could begin as soon as April 2021 for some medical practices.  Repayment depends upon when your payment was issued because repayment begins one year from your payment issue date.

The Centers for Medicare & Medicaid Services (CMS) expanded the Medicare Accelerated and Advance Payment Program (AAP) in March.  This expansion makes the program available for most physicians and group practices that bill Medicare.

Know Your Repayment Options

If your practice accepted AAP loans, it’s important to know your repayment options.

  • By default, your loan is set for automatic claims recoupment. Here’s what that looks like.  Starting 12 months from your loan disbursement date, Medicare Administrative Contractors (MACs) will reduce your Medicare payments to recoup the outstanding AAP loans by a rate of:
    • 25% for the first eleven months (claims withhold)
    • 50% for another 6 months if the loan hasn’t already been repaid in full
    • After the 17 months mentioned above, the loan must be repaid in full within 30 days, or interest will be accrued at 4% until the loan is paid off. Note: no interest is accrued on loans repaid before this time. 
  • Alternatively, you can repay your loans in lump sum amounts. You can repay your practice’s AAP loans through lump sum payment(s) to your Medicare Administrative Contractor.  Make sure to consult with your MAC for full details, stipulations, and accompanying documentation.

At this time, CMS hasn’t provided additional guidance on the repayment process.

Collaboration is Key

As you begin the repayment process, make sure to work with your tax advisor on the amounts to make sure these figures are properly accounted for.

It’s important to work with your MAC and your Adams Brown advisor on any questions or concerns you may have.  As more guidance is issued, we’ll keep you updated and informed.