25 Percent Offset Cycle Begins for Accelerated Payments

Last October, the MACs published updated repayment terms for suppliers that borrowed amounts under the COVID-19 Accelerated and Advance Payments (CAAP) program*. This month, DME MACs implemented the first phase of the repayment plan and began withholding 25 percent of current Medicare payments to offset the outstanding loans. The first phase will continue for 11 months or until the loan is repaid in full, whichever comes first.

Alert the Payment Posters

​Payment posters will be the first to see the offsets, so it is important to give them the heads up on how to identify and post these transactions. The financial control numbers (FCN) on payment remittances for all CAAP offsets are prefixed with CVDAR followed by several numbers.

nlike typical recoupments encountered by the posting team, CAAP FCNs map to the original loan balance and not to an individual patient or claim. CMS will not send an overpayment letter for CAAP offsets, so the actual deduction on remittances is the only correspondence suppliers should expect outside the original CAAP notification letter sent last October.

Posting Batches and Making the Accountants Happy

Because CAAP offsets are fundamentally different than recoupments, credit adjustments, and other familiar posting scenarios, most billing applications do not have an obvious way to post these batches. Software vendors may advise suppliers to simply adjust the check amounts and manage the difference outside the system. That is usually a bad idea.

Instead, consider the following process to manage CAAP offsets inside the billing database for transparency and efficiency throughout:

1. Create a dummy patient record named Medicare CAAP Loan.
2. Create a zero-dollar claim for the patient record. We recommend including the total CAAP loan proceeds in the invoice note for easy reference and comparison.
3. Use the software’s recoupment posting features to balance remittances with CAAP offsets; the offsets will increase the invoice balance.
4. Write off the invoice balance monthly (or when the loan balance reaches zero).

In addition to allowing payment posters to efficiently post and reconcile payment batches, the accounting department can monitor the CAAP invoice balance to track offsets and reduce the CAAP loan liability due to CMS. If applicable, the accounting department can replace funds from a segregated account or another funding source to supplement operating cash account.

Beyond Phase One Offsets

If the balance is not repaid during the first 11-month phase, the MACs will increase the recovery to 50 percent of paid amounts for up to six more months. CMS will charge 4 percent on remaining balances thereafter. All recovery stops as soon as the original loan balance is satisfied.

Alternatively, suppliers can settle the debt with a lump sum repayment in lieu of offsets. Interested suppliers can determine the outstanding loan balance, arrange payment, and get other CAAP support by contacting the applicable DME MACs:

• Suppliers in Jurisdictions B and C should email inquiries to CGS.ERS.CORR@cgsadmin.com.
• Suppliers in Jurisdictions A and D should email dmemsprecoupment@noridian.com or call the COVID hotline at 866-575-4067.

*CAAP is separate and apart from the Paycheck Protection Program and the Provider Relief Fund, including the unsolicited deposit many suppliers received in April 2020. Suppliers that applied for CAAP funding received a cash advance equal to three months of historical Medicare payments.

SOURCE LINKS
​https://www.cms.gov/files/document/se21004.pdf
https://cgsmedicare.com/jc/pubs/news/2021/04/cope21438.html
https://med.noridianmedicare.com/web/jddme/article-detail/-/view/10546/covid-19-accelerated-and-advance-payments-caap-recoupment-and-netting-hierarchy
https://www.cms.gov/files/document/covid-advance-accelerated-payment-faqs.pdf
https://www.cms.gov/files/document/accelerated-and-advanced-payments-fact-sheet.pdf
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