Medicare Delays Repayment Period for AAP Loans

Medicare providers who received an advance payment under the Accelerated and Advance Payment (AAP) Program now have more time to repay these loan funds, under revised payment terms from CMS.

The AAP allowed CMS to make advance payments to providers at the height of the COVID-19 pandemic, distributing more than $98 billion to health care providers to help relieve the financial burden and cash flow disruptions caused by the pandemic.

Repayment, which was originally due to begin in August, will now begin one year from the payment issuance date. At that time, Medicare will withhold 25% of Medicare payments for 11 months. After 11 months, this withholding will increase to 50% for 6 more months. Any outstanding balance after this time will incur a 4% interest rate.

This timeframe gives providers up to 29 months total to repay the funds interest-free. Remember, payments received from the Provider Relief Fund (PRF) under the CARES Act may be used to repay these Medicare loans.

AAP recipients who continue to experience financial hardships can request an Extended Repayment Schedule (ERS). This installment payment plan allows for repayment terms over the course of 3-5 years.

If you received an AAP accelerated payment, CMS will be communicating with you soon on your specific repayment terms and amount owed. If you have any questions about these terms or allocating PRF funds for this purpose, please contact your Grassi advisor or our Emergency Loan Consultants on our Crisis Response & Recovery hotline.

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