CMS detailed Oct. 8 the relaxed repayment terms for providers and suppliers that received COVID-19 loans. The CMS announcement comes after Congress loosened the loan terms and President Donald Trump signed the bill into law.
Five key details:
1. CMS will now begin recouping the loans through the Medicare Accelerated and Advance Payment Program one year from the issuance date of each provider or supplier's accelerated or advance payment. Congress initially required providers to start repaying the COVID-19 loan in August.
2. Providers and suppliers will also have more time to repay the loan in full before interest will accrue. Hospitals will have 29 months to repay the loan, up from 12 months under the previous terms.
3. CMS said the interest rate is also lowered to 4 percent, down from about 10 percent.
4. The repayment rate is also lowered. CMS said the recoupment would begin at a rate of 25 percent for the first 11 months and 50 percent for the following six months.
5. For providers or suppliers experiencing financial hardships, CMS will allow them to request an extended repayment schedule. The extended repayment schedule would allow a provider to pay the debt over the course of three years, or up to five years in the event of "extreme hardship," CMS said.