Repayment will come due in April 2021 for most operators who took out loans during the COVID-19 emergency, LeadingAge is reminding its members.
The organization summarized the terms of the Centers for Medicare & Medicaid Services’ Medicare Accelerated and Advanced Payment program in a Thursday posting, noting that the loan repayment period does not begin until one year after the first payment was made to a provider or supplier. That equates to April for most long-term care industry operators who took advantage of this additional cash flow opportunity during the pandemic public health emergency, it said.
A continuing resolution put forth by Congress and signed by the White House in September held off earlier recoupment by CMS. Additional changes made to the AAP program at that time also remain current, and include the following terms:
Recoupment rate: For the first 11 months of the repayment period, the recoupment rate will be 25% of the claims due to the provider or supplier in the first 11 months of the repayment period, and the offset will be 50% of the claims due to the provider in the final six months.
Repayment period: The repayment timeline before interest starts to accrue on the loan is effectively 29 months.
Interest rate: CMS will begin charging interest on loans not repaid during the 29-month repayment period. The continuing resolution reduced the interest rate to 4% from 10% if the loan was made between the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the end of the COVID-19 public health emergency, which renewed for another 90 days on Jan. 21.
A fact sheet on repayment terms following the continuing resolution is available here.