Medicare Accelerated and Advance Payments and COVID-19: Frequently Asked Questions

Medicare Accelerated and Advance Payments
March 1, 2021
and COVID-19: Frequently Asked Questions
Jim Hahn
In rare situations, Medicare Part A providers (e.g., acute care hospitals, skilled nursing facilities,
Specialist in Health Care
and other inpatient care facilities) and Part B suppliers (e.g., physicians, nonphysician
Financing
practitioners, durable medical equipment [DME] suppliers, and others who furnish outpatient

services) face cash flow challenges due to specified circumstances beyond their control. Under
Marco A. Villagrana
such circumstances, the Centers for Medicare & Medicaid Services (CMS) can provide
Analyst in Health Care
temporary relief through the accelerated payment program (Part A) and the advance payment
Financing
program (Part B). CMS has offered these programs, collectively referred to as the Accelerated

and Advance Payment (AAP) programs, in an attempt to alleviate some concerns about the
financial challenges faced by Medicare suppliers and providers. These amounts eventually are

recovered by Medicare, typically by withholding payment for subsequent claims up to the
amount of the accelerated or advance payments.
Although the AAP programs have been used selectively since their inception during the 1980s, during the Coronavirus
Disease 2019 (COVID-19) public health emergency (PHE), CMS and Congress initially expanded eligibility for these
programs and modified other terms. This included changing the allowable payment amounts, the schedule for recovery of
payments, and the determination of interest payments, when applicable. In response to enactment in March and April 2020 of
relief funds to assist providers and suppliers during the COVID-19 PHE—$100 billion in the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act; P.L. 116-136) and $75 billion in the Paycheck Protection Program and Health Care
Enhancement Act (PPPHCEA; P.L. 116-139)—CMS ceased accepting new applications for advance payments, stating that it
was reevaluating new and pending applications for accelerated payments. As of December 9, 2020, $107.3 billion had been
paid under the AAP programs in calendar year 2020 and during the COVID-19 PHE. Of that amount, nearly $99 billion was
paid to Medicare Part A providers (e.g., hospitals) and $8.5 billion to Part B suppliers (e.g., physicians).
This report addresses frequently asked questions about the Medicare AAP programs, including the terms and conditions of
eligibility, payment amounts and sources of funds, recovery of payments, applicable interest charges, and administrative and
legislative changes during the COVID-19 PHE.
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Contents
Overview ....................................................................................................................... 1
Accelerated and Advance Payment Program Basics .............................................................. 2
What Are the Medicare AAP Programs?........................................................................ 2
How Are Medicare AAPs Different from Typical Medicare Part A and Part B
Payments? ............................................................................................................. 3
How Common Are AAPs? .......................................................................................... 3
AAP Eligibility, Terms, and Conditions .............................................................................. 3
What Types of Providers and Suppliers Are Eligible for Medicare AAPs? .......................... 3
What Are the AAP Qualification Criteria? ..................................................................... 4
Are There Conditions Under Which Providers or Suppliers Could Not Qualify to

Receive AAPs? ....................................................................................................... 4
AAP Requested Amounts and Source of Funds .................................................................... 5
How Much Can Providers and Suppliers Receive in AAPs? ............................................. 5
What Is the Source of AAP Funding?............................................................................ 5
How Do AAPs Affect the Medicare Trust Funds? ........................................................... 5

AAP Recovery, Repayment, and Recoupment...................................................................... 6
How Are AAPs Recovered? ........................................................................................ 6
How and When Does AAP Repayment Begin? ............................................................... 6
What Happens If the Full AAP Is Not Repaid During the Repayment Period? ..................... 6
Can CMS Waive Recoupment of AAPs? ....................................................................... 7
Can CMS Modify the AAP Repayment Period and Terms?............................................... 7
What Appeals Can Be Made Under the AAP Programs? .................................................. 8
Interest Charges on AAPs ................................................................................................. 8
When Is Interest Assessed on AAPs? ............................................................................ 8
What Is the Applicable Interest Rate Applied to Unrecovered AAPs?................................. 8

Can CMS Waive Interest Charges on Unrecovered AAPs? ............................................... 9
AAPs and the COVID-19 Public Health Emergency ............................................................. 9
What Changes Has Congress Made to AAPs During the COVID-19 Public Health
Emergency? ........................................................................................................... 9
Eligibility............................................................................................................ 9
Repayment ........................................................................................................ 10
Limitation on Part B Advance Payments ................................................................ 11
Interest Rate ...................................................................................................... 11
Data Reporting................................................................................................... 11

What Administrative Changes Did CMS Make to the AAP Programs During the
COVID-19 Public Health Emergency? ..................................................................... 11
Did the Amount Providers and Suppliers Can Receive in AAPs Change During the
COVID-19 Public Health Emergency? ..................................................................... 12
How Much in AAPs Has CMS Paid Since the COVID-19 Public Health Emergency
Began? ................................................................................................................ 12
What Is the Current Status of the AAP Programs?......................................................... 12

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Figures
Figure 1. Maximum Repayment Timelines for Medicare Accelerated and Advance
Payments .................................................................................................................. 10

Tables
Table 1. Maximum Amounts of Medicare Accelerated and Advance Payments Available
to Providers and Suppliers During COVID-19 Public Health Emergency ............................ 12

Contacts
Author Information ....................................................................................................... 13


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Medicare Accelerated and Advance Payments & COVID-19: Frequently Asked Questions

Overview
In rare situations, Medicare Part A providers (e.g., acute care hospitals, skil ed nursing facilities,
and other inpatient care facilities) and Part B suppliers (e.g., physicians, nonphysician
practitioners, durable medical equipment [DME] suppliers, and others who furnish outpatient
services) face cash flow chal enges due to specified circumstances beyond their control.1 Under
these circumstances, the Centers for Medicare & Medicaid Services (CMS)—the agency that
administers Medicare—can provide temporary relief through the accelerated payment program
(Part A) and the advance payment program (Part B). Although these programs, collectively
referred to as the Accelerated and Advance Payment (AAP) programs, have been in existence for
decades, they rarely have been used. With the Coronavirus Disease 2019 (COVID-19) public
health emergency (PHE), CMS made AAP programs available in an attempt to al eviate some
concerns about the financial chal enges faced by Medicare suppliers and providers.2
Typical y, providers and suppliers submit claims for services furnished to program beneficiaries
through private contractors—known as Medicare Administrative Contractors (MACs)—that
formal y process the claims and perform related administrative services for the program’s
beneficiaries and health care providers and suppliers. Among many other functions, MACs verify,
pay, and collect any overpayments made for claims submitted by providers and suppliers for
services furnished.3
A provider or supplier may request from a MAC a Medicare AAP when experiencing cash flow
problems that result from (1) a provider or supplier temporarily unable to submit Medicare claims
for payment or (2) a MAC unable to process claims for payment.4 The Secretary of the U.S.
Department of Health and Human Services (HHS Secretary) has authority to make AAPs broadly
available, subject to certain conditions.
AAPs are not add-on or extra payments or loans. An AAP is an up-front payment secured by
expected future claims for payment. Therefore, when a provider submits claims for payment after
receiving an AAP, Medicare does not pay the claims. Rather, the dollar amount of the claims for
payment is applied to recover the balance of the AAP.5 This occurs until the full amount of the
AAP is recovered by Medicare (i.e., the dollar amount of claims submitted after the provider or
supplier received an accelerated or advance payment equals the amount of the accelerated or
advance payment). If Medicare does not fully recover the amount of the accelerated or advance
payment during the applicable repayment period, interest is assessed on the unrecovered amount,
as this balance would be treated as a debt to the federal government.

1 Generally, cash flow for providers and suppliers refers to the outflow of money (cash and cash -equivalents) for
expenses (e.g., payroll, rent/mortgage, equipment, insurance) and inflow of revenue (e.g., payments received from
insurers, patients).
2 T he Secretary of Health and Human Services declared a public health emergency due to COVID-19 on January 31,
2020, under the authority of §319 of the Public Health Service Act.
3 For more information about Medicare Administrative Contractors (MACs), see Center s for Medicare & Medicaid
Services (CMS), “What is a MAC,” at https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-
Administrative-Contractors/What-is-a-MAC.
4 CMS, “Chapter 3 – Overpayments,” §150, in Medicare Financial Management Manual, at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/Do wnloads/fin106c03.pdf.
5 Medicare recovers outstanding Medicare debt by reducing present or future Medicare payments and applying the
amount withheld to the indebtedness. See CMS, Medicare Program Integrity Manual Exhibits, at
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Do wnloads/pim83exhibitspdf.pdf.
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Medicare Accelerated and Advance Payments & COVID-19: Frequently Asked Questions

This report addresses frequently asked questions about the Medicare AAP programs, including
the terms and conditions of eligibility, sources of funds, recovery of payments, applicable interest
charges, and administrative and legislative changes made during the COVID-19 PHE.
Accelerated and Advance Payment Program Basics
What Are the Medicare AAP Programs?
Under the Medicare AAP programs, CMS makes payments before a Medicare provider or
supplier submits a claim (i.e., bil s) for services furnished to Medicare patients.6 The payments are
made up-front for expected future claims by a provider or supplier.7 The accelerated payment
refers to payment made to Part A providers, such as hospitals and other institutional providers; the
advance payment refers to payment made to Part B suppliers, such as physicians and other
practitioners.
Accelerated Medicare Part A payments to eligible hospitals experiencing cash flow problems
were first authorized by the Omnibus Budget Reconciliation Act of 1986 (OBRA 86; P.L. 99-
509), passed on October 21, 1986. OBRA 86, Part 2, Section 9311(a)(1) amended the Social
Security Act (SSA) by adding Section 1815(c)(3), which gives the HHS Secretary authority to
“make available appropriate accelerated payments.” See 42 C.F.R. §413.64(g) for the regulations
for the accelerated payment program for Medicare Part A providers.
Regulations to govern advance payments to Medicare Part B suppliers, which provide outpatient
services (including physicians and other practitioners),8 were first established in 1996 to “address
deficiencies noted by the General Accounting Office in its report analyzing current procedures for
making advance payments.”9 CMS cites SSA, Section 1842(c), “Prompt Payment of Claims,” as
the statutory basis for establishing the advance payment program under Part B.10

6 Some eligible providers—including certain hospitals, inpatient psychiatric facilities (IPF), long-term care hospitals
(LT CHs), inpatient rehabilitation facilities (IRFs), and skilled nursing facilities (SNFs)—may elect to not be paid on a
claim-submitted basis; rather, they may elect to be paid under the Medicare Periodic Interim Payments (PIPs) method.
PIPs involve flat payments to providers made on a fixed interval, such as every two weeks. T he flat payment amount is
determined based on an estimate of a provider’s costs of providing inpat ient services to Medicare beneficiaries. PIPs
permit eligible providers to receive predictable Medicare payment amounts on a reliable schedule. CMS reconciles
PIPs made with actual claims submitted after the close of the provider’s fiscal year using the an nual cost report. For
more details about PIP -eligible providers and PIP payments, see 42 C.F.R §413.64(h) and CMS, “ Chapter 1 – General
Billing Requirements,” §80.4, in Medicare Claims Processing Manual.
7 Per 42 C.F.R. §421.214(f)(3), “A carrier [now called Medicare Administrative Contractors (MACs)] must recover an
advance payment by applying it against the amount due on the claim on which the advance was made. If the advance
payment exceeds the Medicare payment amount, the carrier must apply the unadjusted balance of the advance
payment against future Medicare payments due the supplier.”
8 42 C.F.R. §421.214.
9 T he General Accounting Office (GAO) noted that advance payments to Part B providers in 1988 were made “without
clear, specific authority to do so” and recommended that HCFA (the Health Care Financing Administration, the
precursor to CMS) issue regulations concerning advance payments under Part B. See GAO, Medicare: HCFA Should
Im prove Internal Controls Over Part B Advance Paym ents
, GAO/HRD-91-81, April 1991. In 2004, GAO’s legal name
changed from the General Accounting Office to the Government Accountability Office.
10 See U.S. Department of Health and Human Services (HHS), “ Medicare Program; Part B Advance Payments to
Suppliers Furnishing Items or Services Under Medicare Part B,” 61 Federal Register 49271, September 19, 1996.
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How Are Medicare AAPs Different from Typical Medicare Part A
and Part B Payments?
Under Part A and Part B, Medicare typical y pays a provider or supplier after it has furnished a
service and submitted a claim for payment to Medicare.11 Providers and suppliers have processes
and schedules for submitting claims (i.e., bil ing cycles). Claims are processed and paid by a
MAC on behalf of Medicare and CMS. MACs also have processes and timelines by which they
review and pay claims.12
An accelerated or advance payment occurs before a provider or supplier has furnished the
service(s) and submitted a claim for payment. Such payments are made only after receiving a
request from a provider or supplier and after approval by CMS when a (1) provider or supplier
experiences a temporary delay in its typical bil ing cycle, or (2) MAC experiences a delay in
processing and paying Medicare claims. If these delays lead to financial or cash flow difficulties
for a provider or supplier, it may request an accelerated or advance payment from the MAC.
How Common Are AAPs?
Although statutory authority for accelerated payments was enacted in 1986 and regulations for
advance payments were issued in 1996, CMS has not made historical data available about the
programs. However, CMS recently stated that it had approved 100 AAP requests prior to 2020.13
The AAP programs are intended to be used in highly exceptional situations.14 These situations
consist of the following:
 a delay in payment by a MAC that has caused financial difficulties for the
provider;
 a temporary delay incurred in the provider’s bil processing beyond the
provider’s normal bil ing cycle; or
 where CMS deems an accelerated payment is appropriate.15
AAP Eligibility, Terms, and Conditions
What Types of Providers and Suppliers Are Eligible for Medicare
AAPs?
By regulation, hospitals paid under a Medicare prospective payment system (PPS) are eligible for
accelerated payments, subject to meeting certain qualifications. These hospitals are

11 Note that some providers are paid under a PIPs basis as described under “ What Are the Medicare AAP Programs?”
12 For example, prompt pay requirements. See Social Security Act, §1816(b)(ii)(V).
13 CMS, “ CMS Approves Approximately $34 Billion for Providers with the Accelerated/Advance Payment Program
for Medicare Providers in One Week,” press release, April 7, 2020, at https://www.cms.gov/newsroom/press-releases/
cms-approves-approximately-34-billion-providers-acceleratedadvance-payment-program-medicare.
14 For example, see CMS, “Chapter 3 – Overpayments,” §150, in Medicare Financial Management Manual, at
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Do wnloads/fin106c03.pdf.
15 “Chapter 3 – Overpayments,” §150, in Medicare Financial Management Manual.
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 short-term acute care hospitals paid under the inpatient prospective payment
system (IPPS);
 inpatient psychiatric facilities;
 long-term care hospitals; and
 inpatient rehabilitation facilities.16
Also, skil ed nursing facilities (SNFs) paid under the SNF PPS, home health agencies, and
hospice agencies are eligible for accelerated payments.17
Under Part B, al qualified suppliers are eligible to request advance payments.
There are exceptions to the aforementioned providers and suppliers’ eligibility for AAPs. These
exceptions are addressed in the, “Are There Conditions Under Which Providers or Suppliers
Could Not Qualify to Receive AAPs?” section.
What Are the AAP Qualification Criteria?
To qualify for accelerated or advance payments, an eligible provider or supplier must meet each
of the conditions listed below. The provider’s or supplier’s impaired cash position or financial
difficulty
 leads to the inability to meet current financial obligations;
 is due to (1) abnormal delays in Medicare claims processing or payment by
the MAC or (2) isolated and temporary delays in a provider’s or supplier’s
bil ing;18
 would not be al eviated by cash receipts expected within 30 days;
 is due specifical y to a lag in Medicare bil ing or payments, not to other
payers; and
 the provider or supplier assures that AAP repayment wil be made according
to established time frames and processes.19
Are There Conditions Under Which Providers or Suppliers Could
Not Qualify to Receive AAPs?
For Part A providers, the regulations for the hospital accelerated payments program are set forth
in 42 C.F.R. §413.64(g).20 For Part B suppliers, 42 C.F.R. §421.214 sets the requirements and
procedures for the issuance and recovery of advance payments. Medicare may not make AAPs to
any provider or supplier that
 is in bankruptcy;

16 42 C.F.R. §§412.116(f), 412.432(e), 412.541(f), and 412.632(e).
17 42 C.F.R. §§413.64(g), 413.350(d), and 418.307.
18 In this instance, the provider or supplier must assure and demonstrate that the causes of its billing delays are being
corrected and are not chronic.
19 For example, see CMS, “ Chapter 3 – Overpayments,” §150.3, in Medicare Financial Management Manual, at
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Do wnloads/fin106c03.pdf.
20 For further details, see “ Chapter 3 – Overpayments,” in Medicare Financial Management Manual, p. 53.
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 is under Medicare active medical review or a program integrity
investigation;21
 is delinquent in repaying a Medicare overpayment;22 or
 has not submitted Medicare claims in the preceding 180 days.23
AAP Requested Amounts and Source of Funds
How Much Can Providers and Suppliers Receive in AAPs?
Typical y, the amount of accelerated or advance payments available to providers and suppliers is
based on the recent history (90 days) of Medicare claims. For providers, CMS determines the
amount that is “sufficient to al eviate the impaired cash position,” not to exceed 70% of the
applicable Medicare claims. For suppliers, it is up to 80% of applicable Medicare claims amount.
What Is the Source of AAP Funding?
Funds to pay Medicare claims, including AAPs, come from the Hospital Insurance (HI) Trust
Fund for Part A services and the Supplementary Medical Insurance (SMI) Trust Fund for Part B
services (collectively, Medicare trust funds). The Medicare trust funds are financial accounts in
the U.S. Treasury into which al income to Medicare is credited and from which al benefits and
associated administrative costs are paid.24 An AAP is a payment Medicare makes to a provider or
supplier up-front for anticipated claims the provider or supplier would submit for Medicare
payment in the future. Thus, an AAP is not an added “cost” to the Medicare program and does not
change total program expenditures, but it does modify the timing of the payment.
How Do AAPs Affect the Medicare Trust Funds?
Long-term Medicare trust fund balances should not be affected as a result of AAPs, short of
failures to recover any payments. Typical y, Medicare pays claims after a provider or supplier has
furnished a service and submitted a claim for payment. An AAP is made before a claim for
payment is submitted to or processed by Medicare. In either case, the payment is made from the

21 Medical review is the collection of information and clinical review of medical records by MACs to ensure that
payment is made only for services that meet all Medicare coverage, coding, and medical necessity requirements. For
further information, see CMS, “ Medical Review and Education” at https://www.cms.gov/Research-Statistics-Data-and-
Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review. A Medicare program integrity
investigation encompasses a number of analytic and investigative activities to detect suspected fraud, waste, or abuse.
22 Delinquent means a debt that (1) has not been paid in full by a date specified in a federal agency’s written notice,
unless other payment arrangements have been made, or (2) at any time thereafter, the debtor defaults on a repayment
agreement. See CMS, “Chapter 4 – Definition of Delinquent Debt ,” §70.4, in Medicare Financial Management
Manual
, at https://www.cms.gov/files/document/chapter-4-debt-collection.pdf. Per “ Chapter 3 – Overpayments,” §150,
in the manual, “ Overpayments are Medicare payments a provider or benef iciary has received in excess of amounts due
and payable under the statute and regulations.”
23 Providers’ and suppliers’ historical Medicare claims are the basis for determining the amount of an accelerated or
advance payment. (See 42 C.F.R. §421.214(c)(1), and the “ How Much Can Providers and Suppliers Receive in AAPs?”
section.) If a provider or supplier has not submitted Medicare claims during the applicable period, the MAC has no
basis on which to determine the AAP amount. Providers or suppliers that accept assignment agree to accept Medicare
payment amount s as payment in full for Medicare-covered services (including applicable Medicare co -pays and
deductibles).
24 For an overview of the Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) trust funds and their
revenue sources, see CRS Report R43122, Medicare Financial Status: In Brief.
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Medicare Accelerated and Advance Payments & COVID-19: Frequently Asked Questions

appropriate Medicare trust fund. When a provider or supplier that has received an accelerated or
advance payment subsequently submits a claim for Medicare payment, Medicare does not pay the
claim but “offsets” the amount of any new claim (and future claims) until the amount of the
accelerated or advance payment has been recovered (i.e., repaid).
In the short run, AAPs may temporarily increase Medicare trust fund expenditures, essential y by
paying now for costs that would be incurred in the future. However, future trust fund expenditures
would be expected to be lower, as payouts for claims for those future costs would not be made. In
other words, the total amounts paid from the Medicare trust funds would be expected to be the
same, but the timing of the payouts may shift from one time period (e.g., from a later year) to
another (e.g., to an earlier year). If the AAPs are not fully offset, such as when providers or
suppliers no longer bil Medicare for claims after receiving AAPs and pending any ongoing
recoupment efforts, the trust fund balances would be reduced by such amounts. However, as
noted above, AAPs typical y represent a relatively smal percentage of total Medicare
expenditures for provider and supplier services, and thus, if not completely offset, the impact on
the trust funds would be correspondingly smal .
AAP Recovery, Repayment, and Recoupment
How Are AAPs Recovered?
The amount of accelerated or advance payments paid to a provider or supplier is recovered by
CMS either initial y through repayment, typical y by holding payment for claims to offset up to
the accelerated or advanced amount or, subsequently, by recouping from the provider or supplier
the overpayment (i.e., the excess of payments made over claims submitted, where interest is
applied on the overpayment).25 Initial y, CMS withholds 100% of the provider’s or supplier’s
Medicare payments that are due to the provider or supplier during a specified period after
receiving an AAP. This period is referred to as the “repayment period.” If the full amount of the
accelerated or advance payment is not recovered during the repayment period—through
withholding or direct payment—the balance is considered “delinquent and is recouped as
described below”26
How and When Does AAP Repayment Begin?
Typical y, repayment begins immediately after a provider or supplier has received the AAP. All
providers and suppliers are required to repay in full within 90 days from the date of the
accelerated or advance payment.27
What Happens If the Full AAP Is Not Repaid During the
Repayment Period?
Any unrecovered amount remaining after the 90-day repayment period elapses is considered
“delinquent” and is treated like a Medicare overpayment to be recouped. A delinquent amount is

25 Providers and suppliers also may repay AAPs by making a direct payment(s).
26 CMS, “ Chapter 3 – Overpayments,” §150.3, in Medicare Financial Management Manual, at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/Do wnloads/fin106c03.pdf.
27 “Chapter 3 – Overpayments,” §150.3, in Medicare Financial Management Manual.
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subject to federal debt collection processes that include interest charges and referral to the U.S.
Department of the Treasury (Treasury) for col ection action.28 When a Medicare delinquent
balance exists, the MAC is to send an initial demand letter to the provider or supplier to recoup
the outstanding balance. The demand letter notifies the provider or supplier that the remaining
balance is due, provides the due date (30 days after the date of the initial demand letter), and
includes information about applicable interest charges on the outstanding balance. (See the
“Interest Charges” section for details about interest charges.) The letter also gives the provider or
supplier the option to set an alternative, acceptable payment arrangement if unable to make
payment in full under the terms specified in the letter.29 The letter notifies the provider or supplier
that the delinquent amount wil be referred to Treasury for debt collection if an acceptable
payment arrangement is not established.30
Can CMS Waive Recoupment of AAPs?
Under Medicare regulations, CMS may compromise (or terminate) claims for collection of
overpayments made to Medicare providers or suppliers.31 This authority is limited to certain
circumstances, such as present and prospective inability of the debtor to pay, inability to collect
the full debt, cost of collection, or doubt that the debt can be proven in court.”32
Can CMS Modify the AAP Repayment Period and Terms?
SSA, §1893(f)(1) authorizes the use of repayment plans (cal ed Extended Repayment Schedules
or ERS) to recover overpayments in the event that recoupment would result in hardship to the
provider.33 An ERS can extend repayment obligations over a period ranging from at least six
months to possibly up to several years.34 Approval of an ERS is subject to CMS discretion,
considering factors such as the “(i) total amount of the claim; (i ) debtor’s ability to pay; and (i i)
cost to CMS of administering an instal ment agreement.”35

28 For more information about CMS overpayment collection, see CMS, Medicare Overpayments, fact sheet, March
2020, at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/
OverpaymentBrochure508-09.pdf.
29 T his is formally referred to as an “ Extended Repayment Schedule,” or ERS.
30 In addition, if the provider or supplier does not respond to or pay the remaining balance 60 days after the initial
demand letter is sent, the MAC will send a separate “ Intent to Refer” letter. See CMS, “ Chapter 4 – Debt Collection,”
in Medicare Financial Managem ent Manual, pp. 8-9, at https://www.cms.gov/files/document/chapter-4-debt-
collection.pdf.
31 42 C.F.R. §405.376.
32 45 C.F.R. §30.22.
33 42 U.S.C. §1395ddd(f)(1). In general, hardship exists where the aggregate amount of overpayments (inclusive of
calculated interest) is in excess of 10% of the amount paid to the provider under the most recently submitted cost
report. 42 U.S.C. §1395ddd(f)(1)(B)(i)(I). Most Medicare-certified providers are required to submit an annual cost
report to CMS containing information such as facility characteristics, utilization data, and financial information—
including cost and charges by cost center (in total and for Medicare) and financial statement data.
34 42 U.S.C. §1395ddd(f)(1)(A). ERS regulations are at 42 C.F.R. §401.607(c), and additional guidance can be found in
CMS, “ Chapter 4 – Debt Collection,” §50, in Medicare Financial Managem ent Manual, at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/Do wnloads/fin106c04.pdf.
35 42 C.F.R. §401.607(c)(3)(i)-(iii).
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What Appeals Can Be Made Under the AAP Programs?
The decision to provide accelerated or advance payment and the determination of the amount of
accelerated or advance payment are not subject to appeal. However, administrative appeal rights
would apply to the extent CMS issued overpayment determinations to recover any unpaid
balances on accelerated or advance payments.36 Under administrative appeal rights, providers and
suppliers may request a review of the amount paid and recouped under the accelerated or advance
payment program if the provider or supplier asserts the amounts were calculated incorrectly.37
Interest Charges on AAPs
When Is Interest Assessed on AAPs?
The MAC is required to send an initial demand letter “immediately” after the repayment period
has elapsed and a balance remains.38 Interest is assessed on the 31st day after the initial demand
letter if the provider or supplier does not remit payment in full of any remaining balance by
then.39 (Note that interest accrues beginning on the date of the initial demand letter.) For details
about changes to interest rates and other aspects of the AAP programs made by Congress and the
Trump Administration, see the section “AAPs and the COVID-19 Public Health Emergency.
Also, see Figure 1 for an il ustration of the applicable repayment and interest periods.
What Is the Applicable Interest Rate Applied to Unrecovered
AAPs?
The applicable interest rate for the second quarter (January-March) of federal FY2021 (October
2020-September 2021) is 9.625%.40 The applicable interest rate is determined on a quarterly
basis. The interest rate is based on Treasury’s quarterly rate certification to the U.S. Public Health
Service for delinquencies in the National Research Service Awards and the National Health
Service Corps Scholarship Program.41 The HHS Secretary publishes this rate every quarter in the
Federal Register.42 The Continuing Appropriations Act, 2021 and Other Extensions Act (CAA

36 Since AAPs are generally treated like Medicare overpayments for purposes of recovery, 42 C.F.R. Part 405 – Federal
Health Insurance for T he Aged and Disabled, Subpart I - Determinations, Redeterminations, Reconsiderations, and
Appeals Under Original Medicare (Part A and Part B) contains the appeal rights applicable to Medicare overpayments,
including AAPs.
37 42 C.F.R. §421.214(i). For a general overview of Medicare overpayments collection and appeals processes, see
CMS, Medicare Overpaym ents, fact sheet, March 2020. Also see CMS, Fact Sheet: Expansion Of The Accelerated And
Advance Paym ents Program For Providers And Suppliers During Covid -19 Em ergency
, p. 6, at https://www.cms.gov/
files/document/accelerated-and-advanced-payments-fact-sheet.pdf (hereinafter CMS, Fact Sheet: Expansion of the
AAPs Program
).
38 CMS, “ Chapter 3 – Overpayments,” §150.3, in Medicare Financial Management Manual, at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/Do wnloads/fin106c03.pdf.
39 “Chapter 4 – Debt Collection,” §10, in Medicare Financial Management Manual.
40 T he CMS notice announcing the quarterly interest rate is located at CMS, Pub 100-06 Medicare Financial
Managem ent
, October 13, 2020, at https://www.cms.gov/files/document/r10394fm.pdf. HHS also publishes a
chronological list of interest rates at HHS, “ Interest Rates on Overdue and Delinquent Debts,” at https://www.hhs.gov/
about/agencies/asfr/finance/financial-policy-library/interest-rates/index.html.
41 45 C.F.R. §30.18(b)(2).
42 45 C.F.R. §30.18(b)(2).
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2021; P.L. 116-159) changed the applicable interest rate for certain AAPs made during the
COVID-19 PHE. For more details, see “Interest Rate,” below.
Can CMS Waive Interest Charges on Unrecovered AAPs?
CMS may waive interest on overpayments in limited circumstances, such as where an
overpayment is repaid within 30 days from the date of final determination or where the cost of
collection exceeds the interest charges.43
AAPs and the COVID-19 Public Health Emergency
What Changes Has Congress Made to AAPs During the COVID-19
Public Health Emergency?
The COVID-19 pandemic has and continues to place financial stress on many health care
providers and suppliers. In areas where the impact of COVID-19 was severe, some health care
organizations faced a surge in demand for health care services to treat those affected by the virus.
Simultaneously during the early weeks of the pandemic, fewer patients sought care for
nonemergency services out of caution, as wel as in response to pleas to al ow resources to be
directed to responding to COVID-19-related needs.
To respond to the changes in demand for their services during the COVID-19 PHE, some health
care providers and suppliers postponed furnishing elective and other nonemergency services,
constraining revenue. Prior to 2020, AAPs were not commonly made—CMS has approved only
100 AAPs since the programs’ inceptions in 1989 and 1996, respectively. CMS, administratively,
expanded availability of AAPs, effective March 31, 2020.44 Nearly simultaneously,45 Congress
modified the AAP programs in the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act; P.L. 116-136), enacted March 27, 2020.46 Congress further modified the AAP programs in
the CAA 2021 (P.L. 116-159, enacted October 1, 2020. Congress changed AAP eligibility,
repayment, limits, interest rates, and data reporting requirements in these laws. The changes are
summarized below.
Eligibility
To address potential cash flow chal enges, the CARES Act expands the types of providers eligible
for accelerated payments during the COVID-19 PHE to include the following:47
 critical access hospitals (CAHs),

43 42 C.F.R. §405.378. T he rule defines several circumstances that establish a “final determination,” including various
types of written notices, as well as dates linked to the filing of Medicare cost reports in certain cases when written
notices are not given.
44 CMS, “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID–19 Public
Health Emergency,” 85 Federal Register 19230, April 6, 2020.
45 CMS, “ CMS Approves Approximately $34 Billion for Providers with the Accelerated/Advance Payment Program
for Medicare Providers in One Week,” press release, April 7, 2020, at https://www.cms.gov/newsroom/press-releases/
cms-approves-approximately-34-billion-providers-acceleratedadvance-payment-program-medicare.
46 CMS, Fact Sheet: Expansion of the AAPs Program, accessed on September 23, 2020.
47 CMS, Fact Sheet: Expansion of the AAPs Program.
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 pediatric hospitals, and
 IPPS-exempt cancer hospitals.
Repayment
For AAPs made during the COVID-19 PHE, as expanded by the CARES Act and modified by
CAA 2021, providers and suppliers begin repaying after a delay period of up to one year (12
months from the date of the accelerated or advance payment).48 The HHS Secretary must give the
maximum one-year delay period upon a provider’s or supplier’s request. During the delay period,
a provider or supplier is not required to repay or otherwise be subject to claims offset. If a
provider or supplier requests the maximum delay period al owed, the repayment period begins on
day 366 (or the 13th month) after the provider or supplier received the AAP and lasts through the
29th month. Any remaining balance at the end of the 29th month of the repayment period is subject
to interest charges and debt collection by Treasury. Figure 1 reflects the applicable maximum
delay, repayment, and interest periods for AAPs made during the COVID-19 PHE—as modified
by CMS, the CARES Act, and the CAA 2021—and for AAPs made outside of the COVID-19
PHE (i.e., pre- and post-COVID-19 PHE).
In addition, the repayment percentage (“offset”) was reduced from 100% to 25% of the claims
amount for the first 11 months after the payment delay period, then from 100% to 50% of the
claims amount for the subsequent 6 months. After that time—a total of 29 months inclusive of the
payment delay period—interest would be assessed on the remaining balance. (The applicable
interest rate is addressed below.)
Figure 1. Maximum Repayment Timelines for Medicare Accelerated and Advance
Payments

Source: CRS review of applicable laws and Medicare regulations and guidance.
Notes: For simplicity and consistency, time is indicated in months, although the deadlines for periods outside of
the Covid-19 PHE are defined in days (e.g., 90 days). Covid-19 = Coronavirus Disease 2019; AAP = Medicare
Accelerated and Advance Payment; PHE = public health emergency.

48 See CMS, Fact Sheet: Expansion of the AAPs Program , p. 2. Also, the period during which AAP repayment is
postponed is referred to as the payment “ delay period” for the remainder of this report.
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Limitation on Part B Advance Payments
The CAA 2021 created a $10 mil ion limit on advance payments to Part B suppliers, beginning
with the date of enactment (October 1, 2020) through the remainder of 2020 and for each
subsequent year during which there is a COVID-19-related PHE.
Interest Rate
The interest rate is reduced from 10.25% to 4.00% for payments made under the AAP programs
“and comparable programs” between the date of enactment of the CARES Act and the end of the
COVID-19 PHE.
Data Reporting
CMS is required to publish data about the payments made under the AAP programs on its public
website. The published data would include payment totals under each of the HI and SMI trust
funds, as wel as by type of provider or supplier receiving such payments. The outstanding
amounts remaining to be recouped and repaid to the HI and SMI trust funds would be required to
be published no later than 15 months after the passage of the CARES Act and every 6 months
thereafter until al AAPs have been recovered.
What Administrative Changes Did CMS Make to the AAP
Programs During the COVID-19 Public Health Emergency?
As Congress was deliberating the CARES Act, CMS made several changes to the AAP program
during the early part of the COVID-19 PHE—March 2020.49 CMS implemented an expedited
process for providers and suppliers to request AAPs and ensured that al eligible Medicare
providers and suppliers who submit a request to the appropriate MAC and meet the required
qualifications wil be approved to receive accelerated or advance payments. Applicants for
accelerated or advance payments were asked to (1) assert the reason for the request as a “delay in
provider/supplier bil ing process of an isolated temporary nature beyond the provider’s or
supplier’s normal bil ing cycle and not attributable to other third party payers or private patients”
and (2) state that the request was for an accelerated or advance payment due to the COVID-19
pandemic.50
CMS also made an additional modification to the advance payments program for suppliers
furnishing items and services under Part B.51 Specifical y, through an interim final rule, CMS
added “exceptional circumstances” under a “Public Health Emergency” or a “Presidential
Disaster Declaration” to the conditions under which advance payments under Part B could be
made.
As noted earlier in this report, AAPs were not widely used prior to the COVID-19 PHE. After the
initial administrative expansion of AAPs, CMS paused COVID-19-related AAPs, effective April

49 CMS administrative changes and changes enacted by Congress in the CARES Act occurred nearly simultaneously,
during March 2020. Congress further modified the AAP programs in CAA 2021, enacted on October 1, 2020.
50 See CMS, Fact Sheet: Expansion of the AAPs Program .
51 See CMS, “ Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19
Public Health Emergency,” 85 Federal Register 19230, April 6, 2020.
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26, 2020. CMS cited the availability of Provider Relief Fund (PRF) assistance in the CARES Act,
enacted on March 27, 2020, as a reason for the pause.52
Did the Amount Providers and Suppliers Can Receive in AAPs
Change During the COVID-19 Public Health Emergency?
Yes. During the COVID-19 PHE, the amount of AAPs available changed. Most providers and
suppliers were able to request greater amounts in AAPs—up to 100% of their Medicare payment
amount for a three-month period (rather than the 70% for providers and 80% for suppliers under
regular program rules). Some providers were able to request an even higher amount: IPPS acute
care hospitals, pediatric hospitals, and IPPS-exempt cancer hospitals were able to request up to
100% of their Medicare payment amount for a six-month period, and CAHs were able to request
up to 125% of their Medicare payment amount for a six-month period. Table 1 summarizes the
AAP amounts available to providers and suppliers during the COVID-19 PHE.
Table 1. Maximum Amounts of Medicare Accelerated and Advance Payments
Available to Providers and Suppliers During COVID-19 Public Health Emergency
Provider and Supplier Type
AAP Amount
Inpatient acute care, children’s, and certain cancer
Up to 100% of the unbil ed or unpaid Medicare amount
hospitals
for a six-month period
Critical access hospitals
Up to 125% of the unbil ed or unpaid Medicare
payment amount for a six-month period
Al other providers and suppliers
Up to 100% of the unbil ed or unpaid Medicare
payment amount for a three-month period
Sources: CRS analysis of Centers for Medicare & Medicaid Services regulations and guidance, the Coronavirus
Aid, Relief, and Economic Security Act (P.L. 116-136), and the Continuing Appropriations Act, 2021 and Other
Extensions Act (P.L. 116-159).
Notes: COVID-19 = Coronavirus Disease 2019; AAP = Medicare Accelerated and Advance Payment.
How Much in AAPs Has CMS Paid Since the COVID-19 Public
Health Emergency Began?
As of December 9, 2020, CMS has paid $107.3 bil ion under the AAP programs during the
COVID-19 PHE. Of that amount, nearly $99 bil ion was paid to Medicare Part A providers (e.g.,
hospitals) and $8.5 bil ion to Part B suppliers (e.g., physicians).53
What Is the Current Status of the AAP Programs?
Although the Medicare AAP programs predated the COVID-19 PHE declaration, they had
previously been used selectively. Congress and CMS expanded the programs’ use during the
COVID-19 PHE. In addition, in response to the pandemic, Congress provided $100 bil ion in the

52 CMS, “ CMS Reevaluates Accelerated Payment Program and Suspends Advance Payment Program ,” press release,
April 26, 2020, at https://www.cms.gov/newsroom/press-releases/cms-reevaluates-accelerated-payment -program-and-
suspends-advance-payment -program.
53 CMS, Medicare Accelerated and Advance Payments Program COVID-19 Public Health Emergency Payment Data,
December 2020.
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CARES Act and $75 bil ion through the Paycheck Protection Program and Health Care
Enhancement Act (P.L. 116-139) to assist providers and suppliers during the COVID-19 PHE. In
response to enactment of these relief funds distributed through the PRF, CMS ceased accepting
new applications for advance payments for Medicare suppliers and stated it was reevaluating new
and pending applications for accelerated payments for Medicare providers, effective April 26,
2020.54 Since then, the CAA 2021 changed the repayment timeline for AAPs made to al
providers and suppliers during the COVID-19 PHE, as noted above. On October 8, 2020, CMS
announced that it would no longer accept COVID-19-related applications for AAPs but would
continue to monitor COVID-19-related provider and supplier impacts.55


Author Information

Jim Hahn
Marco A. Villagrana
Specialist in Health Care Financing
Analyst in Health Care Financing



Acknowledgments
Brion Long, a CRS Visual Information Specialist, designed Figure 1 in this report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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copy or otherwise use copyrighted material.


54 CMS, Fact Sheet: Expansion of the AAPs Program .
55 CMS, Fact Sheet: Repayment Terms for Accelerated and Advance Payments Issued to Providers and Suppliers
During COVID-19 Em ergency
, October 8, 2020.
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