Home Health & Hospice Week

If your repayment of your COVID-19 Accelerated and Advance Payment amount hasn’t come due yet, it’s bound to soon. You — and your cash flow — need to be ready.

Review: Back in March of 2020, under the direction of the CARES Act, the Centers for Medicare & Medicaid Services began taking CAAP requests and making related payments to Medicare providers to assist with COVID-related hardships. Providers could request up to 100 percent of their Medicare payment amount for a three-month period, reviews the HHS Office of Inspector General in a recent report on CAAP payment compliance. As of September 2020, the Medicare Adminis­trative Contractors disbursed more than $100 billion in CAAP program payments to more than 46,000 providers, the OIG notes in the report.

As required by the CARES Act, CMS began recouping CAAP payments after 12 months, with the earliest repayments coming due in March 2021 (see HHHW by AAPC, Vol. XXX No. 13). Beginning at that year mark, the repayment schedule was 25 percent of the CAAP total for 11 months, 50 percent for six months, and then 100 percent of the balance due at “29 months from the initial issuance of the CAAP,” CMS notes in a CAAP Frequently Asked Question set last updated in August.

That 29-month mark hit in September for the earliest CAAP recipients, notes HHH Medicare Administrative Contractor Palmetto GBA in a CAAP article published Nov. 30. But the exact date of the balance coming due varies, depending on when providers received their payments.

CAAPs Come With Pros, Cons

CAAP funds have some positives compared to other COVID relief funding, experts note. For example, “unlike other COVID-driven funding distributions,” CAAP payments “are not restricted to a certain use and may be used like any other cash an entity may receive,” note accountants Anna Stevens and Yoram Kappel with Texas-based accounting firm Weaver in online analysis.

And CMS was quick to disburse the payments, the OIG notes. “CMS required the MACs to issue CAAP Program payments to the providers within seven days from receiving a provider’s request,” the watchdog agency details in the report.

The funding source comes with comparative downsides as well, however.

The repayment structure doesn’t have much in the way of flexibility. “CMS will not reduce the CAAP recoupment percentage or defer CAAP recoupment at the request of a provider or supplier,” it clarifies in its FAQs. “The terms for CAAP recovery are specified by Congress in the Continuing Appropriations Act, 2021 and Other Extensions Act.”

And the CAAP repayment follows an agency through a change of ownership, CMS clarifies in another of the FAQs. “If a provider or supplier sells their business or undergoes a change of ownership while still owing an outstanding CAAP balance, the CAAP balance will generally transfer to the new owner for repayment, consistent with Medicare change of ownership rules,” the FAQ says.

Another con is that providers can’t prioritize CAAP repayments over other kinds of repayments. “COVID-19 ARs are last,” emphasizes HHH MAC National Government Services on its CAAP webpage. “Regular Medicare AR debts will be netted prior to any COVID-19 ARs,” NGS explains. This includes both “any ARs created after the COVID-19 ARs are created” and “ERS monthly payments,” the MAC says. “Normal offsets will occur first, then COVID ARs will net.”

NGS offers this example: “The provider is scheduled to receive a payment of $100 on their [Remittance Advice]. They have an ERS set up for $50. COVID-19 recoupment will be 25 percent of the $100 RA amount ‘owed’ to provider. Therefore, the COVID-19 recoupment amount will be $25, and the final net payment for the RA will be $25.”

Plus: “If a providers or other supplier has additional outstanding overpayments, the oldest dated demand letter amounts will be recouped first,” Palmetto GBA says.

Finally, if you are affiliated with another provider through a Tax ID number, you can get hit with their CAAP repayment withhold. “CMS is looking at the Tax ID to get the recoupment from the advanced payment regardless of which PTAN actually received the payment,” NGS explains.

Explore An ERS If You’re Strapped

While CMS may not have any wiggle room with CAAP repayment terms, “the provider has all repayment and recoupment options normally available when dealing with other Medicare overpayments,” notes consulting firm The Health Group in Morgantown, West Virginia. “These options include requesting an Extended Repayment Schedule,” says The Health Group in its electronic newsletter.

“If facilities are unable to pay and meet certain hardship criteria, they may qualify for an Extended Repayment Schedule (ERS)” for CAAP repayment, agree Karl Rebay, Georgia Green, and Denise Stark with accounting firm Moss Adams.

But remember: “Providers can request an ERS only after their demand letter is issued,” Rebay, Green, and Stark advise in online analysis.

Here’s how agencies get that demand letter: “If the total amount of the accelerated/advance payment is not recovered within 29 months from the date the payment was made, a demand letter for the outstanding balance will be issued,” NGS explains. “The demanded amount will be subject to a 4 percent interest rate,” the MAC adds.

Do this: When you get your demand letter, make sure your overpayment figure is correct. “Reconcile the amount of the original loan, dates, and recoupment amounts on remits from your MAC to the amount requested from the MAC to ensure the demand amount is accurate,” Rebay, Green, and Stark recommend. “If the debt amount is incorrect, providers have 15 days to file a CAAP Debt Dispute Form with their MAC.”