Repayment and Recovery of COVID-19 CAAP

The Health Group

In March 2021, CMS began recovering COVID-19 Accelerated and Advance Payment (“CAAP”) balances.  After one year, the recovery of the advanced monies was made at twenty-five percent (25%) over eleven months, followed by fifty percent (50%) over the following six (6) months.  Thereafter, any unrecovered monies will be collected at one hundred percent (100%) of Medicare payments until such time as all monies are recovered including four percent (4%) interest.

Depending on when the provider received the CAAP, 100% withholdings may have already started to recover remaining balances.  At the end of the 29th month following the receipt of CAAP, the Medicare Administrative Contractor (“MAC”) should have issued a demand for repayment of any remaining balance.  The provider has all repayment and recoupment options normally available when dealing with other Medicare overpayments.  These options include requesting an Extended Repayment Schedule.

An Extended Repayment Schedule (“ERS”) is a statutorily authorized debt payment schedule, which allows a provider or supplier experiencing financial hardship to pay debts over time in monthly installments, including interest.  An ERS can be extended to as many as five years if certain extreme hardship criteria are met. Providers and suppliers may request an ERS after the Medicare Administrative Contractor (MAC) issues a demand letter requiring repayment of a debt. Providers and suppliers should contact their MAC for information on how to request an ERS. A provider or supplier must meet certain statutory and regulatory requirements to be eligible for an ERS and also will need to meet specified criteria related to financial “hardship” or “extreme hardship” under 42 C.F.R. 401.607(c)(2) in order to be eligible for an ERS.

CAAP FAQ is available here