Final Update on AAP Recoupment Delay

On Wednesday, September 30, 2020, the Senate passed the bipartisan government funding bill that will relax Medicare loan repayments in the wake of the 2019 Novel Coronavirus (“COVID-19”) pandemic. The House passed this bill the week prior to the Senate vote, and the President signed the bill into law the very same day that the Senate approved the bill.

Providers who initially received a loan through the CARES Act Advanced and Accelerated Payment Program (“AAP”) will now have one year from when the loan was issued before recoupment will begin. This gives providers much more time to repay these loans, as opposed to the initial 120-day recoupment period that was previously intact. Furthermore, the extension speaks to the AAP’s intent—AAP loans were meant to keep Medicare-reimbursed providers financially stable during the nationwide pandemic, which is still ongoing.

In addition to the recoupment period being extended, the recoupment rate will also be lowered. Initially, it would have been 100% recoupment until the loan was repaid. Moving forward, after the one year passes and recoupment begins, the Centers for Medicare and Medicaid Services (“CMS”) will recoup 25% for the first 11 months and then 50% for the following 6 months. Lastly, the interest rate on the AAP loans has been lowered from 9.6% to 4%.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in the CARES Act and when to expect accelerated payment recoupment to begin. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.