What Home Health Providers Need to Know About Medicare Loan Recoupment

It has been six months since the U.S. Centers for Medicare & Medicaid Services (CMS) gave home health agencies and other Medicare providers a reprieve from having to pay back advance and accelerated payment loans.

But recoupment for these loans is just around the corner. To avoid future financial headaches, providers must be prepared to navigate this process from start to finish.

“They need to know what the total amount of the advanced payment was,” Beth Prince, vice president of revenue management services at Corridor, told Home Health Care News. “You have to know what your starting balance is because when you submit claims, you’re going to have recoupment in varying amounts over time.”


Corridor is an Overland Park, Kansas-based company that specialized in helping home health, hospice and home care providers with revenue cycle management.

Last year, many home health providers took on advance and accelerated payment loans from CMS as a means to ease the financial challenges associated with the COVID-19 emergency.

Overall, CMS had disbursed $106 billion in accelerated payments, according to federal data.


The repayment period for providers was originally set to begin 120 days after funds were received. But when the time came for CMS to collect, the agency opted to instead give Medicare-reimbursed organizations more wiggle room.

In October, CMS officials announced amended repayment terms: recoupment was to be formally delayed until one year after the payments were issued.

That time has come, with recoupment for advance and accelerated payment loans set to begin in April. For providers who took part in these loans, it is crucial to be clear on what exactly is being recouped, Prince explained.

“Providers need to be able to reconcile back so that they have an accounting of exactly how much they owe CMS at what point in time,” she said.

For the first 11 months of the repayment period, claim payments will be recouped at the provider level at 25%.

“The way that equates is to say, if you have a payment that you’re going to receive in the amount of $100, your provider number is going to be recouped at $25 of that payment to go toward your repayment,” Prince said.

After 11 months, the percentage of recoupment toward the overpayment goes up to 50%.

“For the next six months, you will essentially have your payments recouped at 50%,” Prince said. “And at the end of that six months … if there’s still an outstanding balance, CMS will then issue what’s called a demand letter. The demand letter is essentially a request for any additional funds that are still owed to be paid in one lump sum.”

Once a provider receives this letter, it has 31 days before accruing interest on its loan. The interest rate is 4%, a reduction from the previously announced 10.25%.

Providers who are still unable to repay their loans after the initial 17 months pass can file for an extended repayment plan. 

“Their Medicare administrative contractor (MAC) can then outline exactly what needs to happen,” Prince said. “It involves filling out an application. There’s usually some supporting documentation that’s filed with it. Then CMS or the MAC will make a decision on whether or not you qualify for an extended repayment plan.”

Moving forward, it’s important for providers to file Medicare claims in a timely manner, according to Prince.

“You want to make sure that you’re not holding claims for any particular reason,” she said. “You are already under a five-day penalty for RAPs. You don’t want to have penalties on top of the amount that you’re recouped.”

Providers should stay on top of how much they are paying back with each remit.

“You need to have clear, concise reconciliation processes in place because this is going to be very much jumping through hoops from a reconciliation standpoint,” Prince said.

For providers hoping to avoid the recoupment process, CMS outlined the procedure for paying a lump-sum amount ahead of schedule.

Still, providers who find themselves completely unprepared for the recoupment process may face challenges down the road, according to Prince.

“You’re going to have some surprises on your reimbursement front because all of a sudden, you’re going to have 25% of your Medicare money being taken out of your pocket until you repay back that loan,” she said.

At one point, home health and hospital trade groups had hoped CMS would forgive the Medicare loans entirely, but there hasn’t been much momentum on that front.

Companies featured in this article: