Medicare Accelerated and Advance Payment Program: A Comprehensive Guide for Providers

Table of Contents#

1. What Is the Medicare Accelerated and Advance Payment Program?
2. Eligibility Requirements for Providers
   2.1 Part A Eligible Providers
   2.2 Part B Eligible Providers
3. How to Apply for Accelerated or Advance Payments
4. Key Repayment Terms and Conditions
5. Benefits of the AAP Program
6. Potential Risks and Considerations
7. Frequently Asked Questions (FAQs)
8. Conclusion
9. References

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1. What Is the Medicare Accelerated and Advance Payment Program?#

The AAP Program is a CMS initiative designed to provide immediate financial relief to Medicare providers experiencing significant revenue losses or cash flow shortages. It offers two types of payments:

• Accelerated Payments: Reserved for Part A providers (e.g., hospitals, skilled nursing facilities), these are early payments on anticipated future Medicare claims.
• Advance Payments: For Part B providers (e.g., physicians, durable medical equipment suppliers), these are lump-sum advances based on historical Medicare billing data.

Crucially, this is not a grant—all payments must be repaid to CMS. However, if repaid within the specified timeline, no interest or fees are charged.

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2. Eligibility Requirements for Providers#

Eligibility varies slightly between Part A and Part B providers, but core criteria apply to both. CMS updates eligibility during public health emergencies (e.g., COVID-19), so always check the latest guidance before applying.

2.1 Part A Eligible Providers#

You must:

• Be enrolled in Medicare Part A and in good standing (no active sanctions or exclusions).
• Have billed Medicare for claims within 180 days immediately prior to applying.
• Not be in bankruptcy.
• Not be under active medical review or program integrity investigation.
• Have no outstanding delinquent Medicare overpayments (or an approved repayment plan).
• Demonstrate a significant disruption to revenue (e.g., reduced patient volume, delayed claims processing) due to an emergency or hardship.
• Be one of the following provider types:
  • Acute care hospitals
  • Critical access hospitals
  • Skilled nursing facilities
  • Home health agencies
  • Hospices
  • Inpatient rehabilitation facilities

2.2 Part B Eligible Providers#

You must:

• Be enrolled in Medicare Part B and in good standing.
• Have billed Medicare for claims within 180 days immediately prior to applying.
• Not be in bankruptcy.
• Not be under active medical review or program integrity investigation.
• Have no outstanding delinquent Medicare overpayments (or an approved repayment plan).
• Demonstrate a significant revenue disruption.
• Be one of the following supplier types:
  • Physicians, physician assistants, nurse practitioners
  • Clinical social workers, physical therapists
  • Durable medical equipment (DME) suppliers
  • Diagnostic testing facilities

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3. How to Apply for Accelerated or Advance Payments#

The application process is managed through your local Medicare Administrative Contractor (MAC)—the entity that processes Medicare claims in your region. Follow these steps:

1. Confirm Eligibility: Review CMS’s latest eligibility criteria and ensure your practice meets all requirements.
2. Gather Documentation: Prepare the following:
   • Proof of Medicare enrollment (e.g., your National Provider Identifier (NPI) enrollment verification).
   • Financial statements showing recent revenue losses (e.g., monthly billing reports, profit-and-loss statements).
   • A signed statement outlining your hardship or revenue disruption.
3. Submit Application:
   • Most MACs offer online applications through their provider portals (e.g., Palmetto GBA, Novitas Solutions).
   • If online submission isn’t available, request a paper application from your MAC and mail it to the specified address.
4. Wait for Approval: CMS typically processes applications within 7 calendar days of receipt by the MAC. During emergencies such as the COVID-19 pandemic, processing times were reduced to as few as 4–6 days. You’ll receive a written notice outlining the approved payment amount and repayment terms.
5. Receive Funds: Approved payments are deposited directly into your practice’s bank account within a few business days of approval.

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4. Key Repayment Terms and Conditions#

Repayment rules vary by provider type and whether the payment is issued during an emergency. Here are the standard terms:

Part A Providers#

• Repayment begins 120 days after the date of the accelerated payment.
• For the first 11 months of repayment, CMS recoups 25% of your monthly Medicare claims until the balance is paid off.
• If the balance remains after 11 months, recoupment increases to 50% of monthly claims for another 6 months.

Part B Providers#

• Repayment starts 120 days after the advance payment is issued.
• For the first 11 months of repayment, CMS recoups 25% of your monthly Medicare claims until the balance is paid off.
• If the balance remains after 11 months, recoupment increases to 50% of monthly claims for another 6 months.

Emergency Adjustments (e.g., COVID-19)#

During public health emergencies, CMS may modify terms to ease repayment burdens. For example, during the COVID-19 emergency, the Continuing Appropriations Act, 2021 (P.L. 116-159) changed the repayment terms for all providers who received AAP payments:

• Repayment was delayed for one year from the date the payment was issued (instead of 120 days).
• After the one-year period, CMS recouped 25% of Medicare payments for 11 months.
• Recoupment then increased to 50% for another 6 months.
• If any balance remained after this 29-month period, interest accrued at 4% from the date of a demand letter.

Late Repayment Consequences#

If you fail to repay within the agreed timeline:

• Interest accrues at a rate set by statute (4% under the COVID-19 emergency terms; historically higher rates applied under standard program terms).
• CMS may issue a demand letter requiring full repayment within 30 days.
• CMS may suspend your Medicare enrollment or take legal action to recover the debt.

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5. Benefits of the AAP Program#

• Immediate Cash Flow Relief: Access funds quickly to cover critical expenses like staff salaries, medical supplies, and rent.
• Interest-Free (When Repaid On Time): No additional costs if you adhere to the repayment schedule.
• No Collateral Required: Advances are based on your Medicare billing history, not assets.
• Flexible Eligibility During Emergencies: CMS often expands eligibility during crises to support more providers.

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6. Potential Risks and Considerations#

• Repayment Burden: Recoupment of claims can strain future cash flow, especially if your practice’s revenue doesn’t rebound quickly.
• Interest Charges: Late repayment leads to accumulating interest, increasing the total amount owed.
• Enrollment Risks: Failure to repay can result in suspension of your Medicare enrollment, which is catastrophic for most practices.
• Administrative Work: Applying requires gathering and submitting detailed documentation, which takes time and resources.

Before applying, consult a financial advisor to ensure the program aligns with your practice’s long-term financial goals.

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7. Frequently Asked Questions (FAQs)#

Q: Is the AAP Program a grant?#

A: No. It is a loan that must be repaid in full. There are no forgivable portions unless CMS announces a specific relief initiative during an emergency.

Q: How much can I receive?#

A: The amount varies based on your historical Medicare billing:

• Part A providers: Up to 6 months of your average monthly Medicare payments.
• Part B providers: Up to 3 months of your average monthly Medicare payments.

Q: Can I apply if I have outstanding Medicare overpayments?#

A: Generally, no. However, if you have an approved repayment plan with CMS and are in good standing, you may be eligible. Check with your MAC for details.

Q: What if I can’t repay on time?#

A: Contact your MAC immediately to request a repayment extension or modified terms. CMS may offer flexibility during emergencies, but you must proactively communicate your situation.

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8. Conclusion#

The Medicare Accelerated and Advance Payment Program is a valuable tool for providers facing temporary cash flow shortages, especially during crises. By understanding eligibility, application steps, and repayment terms, you can make an informed decision about whether to use this program to support your practice.

Remember: Always verify the latest guidelines from CMS and your local MAC, as terms and eligibility can change based on public health or economic conditions. Consulting a financial professional can also help you navigate the program’s risks and benefits effectively.

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9. References#

• COVID-19 Accelerated and Advance Payments — CMS
• Fact Sheet: Repayment Terms for Accelerated and Advance Payments — CMS
• Medicare Administrative Contractor (MAC) Directory — CMS
• Medicare Accelerated and Advance Payments and COVID-19 — Congressional Research Service
• Medicare Accelerated and Advance Payments for COVID-19 Revenue Loss — KFF