Full text
Amy J. Frontz
Deputy Inspector General
for Audit Services
September 2024
A-05-23-00005
Department of Health and Human Services
OFFICE OF
INSPECTOR GENERAL
CMS RECOVERED MEDICARE
PAYMENTS TO PROVIDERS
UNDER THE
COVID-19 ACCELERATED AND
ADVANCE PAYMENTS PROGRAM
IN COMPLIANCE WITH
FEDERAL REQUIREMENTS
Inquiries about this report may be addressed to the Office of Public Affairs at
Public.Affairs@oig.hhs.gov.
Office of Inspector General
https://oig.hhs.gov
The mission of the Office of Inspector General (OIG) is to provide objective oversight to promote the
economy, efficiency, effectiveness, and integrity of the Department of Health and Human Services (HHS)
programs, as well as the health and welfare of the people they serve. Established by Public Law
No. 95-452, as amended, OIG carries out its mission through audits, investigations, and evaluations
conducted by the following operating components:
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Notices
THIS REPORT IS AVAILABLE TO THE PUBLIC
at https://oig.hhs.gov
Section 8M of the Inspector General Act, 5 U.S.C. App., requires
that OIG post its publicly available reports on the OIG website.
OFFICE OF AUDIT SERVICES FINDINGS AND OPINIONS
The designation of financial or management practices as
questionable, a recommendation for the disallowance of costs
incurred or claimed, and any other conclusions and
recommendations in this report represent the findings and
opinions of OAS. Authorized officials of the HHS operating
divisions will make final determination on these matters.
OIG.HHS.GOV
September 2024 | A-05-23-00005
CMS Recovered Payments to Providers Under the COVID-19 Accelerated
and Advance Payments Program in Compliance With Federal
Requirements
Why OIG Did This Audit
• The Centers for Medicare & Medicaid Services (CMS) disbursed more than $103 billion in COVID-19
Accelerated and Advance Payments (CAAP) Program payments to more than 46,000 providers.
• COVID-19 created extraordinary challenges for the delivery of health care and human services to the
American people. As the oversight agency for Health and Human Services (HHS), the Office of
Inspector General (OIG) oversees HHS’s COVID-19 response and recovery efforts. This audit is part of
OIG’s COVID-19 response strategic plan.
• This audit determined whether CAAP Program payments were recovered in compliance with the
repayment terms of the Continuing Appropriations Act, 2021 and Other Extensions Act and other
Federal requirements.
What OIG Found
CMS recovered the CAAP Program payments made to providers in compliance with the repayment terms of
the Continuing Appropriations Act, 2021 and Other Extensions Act and other Federal requirements. As of the
end of our fieldwork, of the 100 sampled providers totaling $4.4 billion in CAAP Program payments, the
Medicare Administrative Contractors completed recovery from 97 sampled providers and continued the
recovery from the remaining 3 providers.
What OIG Recommends
Based on our sample, we found that CMS recovered the CAAP Program payments made to providers in
compliance with the repayment terms of the Continuing Appropriations Act, 2021 and Other Extensions Act
and other Federal requirements. Therefore, we do not have any recommendations.
CMS elected not to provide comments on our draft report.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005)
TABLE OF CONTENTS
INTRODUCTION ............................................................................................................................ 1
Why We Did This Audit ..................................................................................................... 1
Objective .......................................................................................................................... 1
Background ...................................................................................................................... 2
The Medicare Program ......................................................................................... 2
COVID-19 Accelerated and Advance Payments Program ...................................... 2
COVID-19 Accelerated and Advance Payments Program Repayment
Terms and Recovery Process ............................................................................ 2
How We Conducted This Audit ......................................................................................... 4
RESULTS OF AUDIT ....................................................................................................................... 4
Completed Recovery From 97 Sample Providers ............................................................. 5
Recovery From Two Providers Is in Progress Based on Extended Repayment
Schedules ...................................................................................................................... 5
Recovery From One Provider Is in Progress Through the Treasury .................................. 6
CONCLUSION ................................................................................................................................ 6
APPENDICES
A: Audit Scope and Methodology ..................................................................................... 7
B: Statistical Sampling Methodology ................................................................................ 9
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 1
INTRODUCTION
WHY WE DID THIS AUDIT
The Centers for Medicare & Medicaid Services (CMS) may provide temporary relief loans
through the accelerated payment program for certain Part A providers and through the
advance payment program for certain Part B providers and suppliers when these providers and
suppliers face cashflow challenges due to circumstances beyond their control. These rarely
used programs, which have existed for decades, are collectively referred to as the Accelerated
and Advance Payments (AAP) Program. The Coronavirus Aid, Relief, and Economic Security
(CARES) Act (P.L. No. 116-136), which Congress passed on March 27, 2020, expanded the AAP
Program to more providers to relieve pandemic-caused financial strain. CMS has referred to
this expansion as the COVID-19 Accelerated and Advance Payments (CAAP) Program.1
The CARES Act described the repayment terms for the CAAP Program payments. The
Continuing Appropriations Act, 2021 and Other Extensions Act (P.L. No. 116-159), which
Congress passed on October 1, 2020, amended the repayment terms of the CAAP Program.
As of September 17, 2020, CMS, through Medicare Administrative Contractors (MACs),2
disbursed more than $103 billion in CAAP Program payments to more than 46,000 providers. A
prior Department of Health and Human Services (HHS), Office of Inspector General (OIG) audit
found that CMS and its MACs generally made CAAP Program payments to providers in
compliance with the CARES Act and other Federal requirements.3 The MACs began the
recovery efforts 1 year after making the payments.
COVID-19 has created extraordinary challenges for the delivery of health care and human
services to the American people. As the oversight agency for HHS, OIG oversees HHS’s COVID-
19 response and recovery efforts. This audit is part of OIG’s COVID-19 response strategic plan.4
OBJECTIVE
Our objective was to determine whether CAAP Program payments were recovered in
compliance with the Continuing Appropriations Act, 2021 and Other Extensions Act and other
Federal requirements.
1 As of October 8, 2020, CMS stopped accepting requests for CAAP program payments. To receive a CAAP Program
payment, the CARES Act required providers to submit a request.
2 CMS uses MACs to, among other things, process and pay Medicare claims submitted for medical services.
3 Payments Made to Providers Under the COVID-19 Accelerated and Advance Payments Program Were Generally in
Compliance With the CARES Act and Other Federal Requirements (A-05-20-00053).
4 OIG’s COVID-19 response strategic plan and oversight activities can be accessed at HHS-OIG’s Oversight of
COVID-19 Response and Recovery | HHS-OIG.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 2
BACKGROUND
The Medicare Program
Under Title XVIII of the Social Security Act, the Medicare program provides health insurance for
people aged 65 and over, people with disabilities, and people with permanent kidney disease.
Medicare has different parts that help cover specific medical services and supplies. Medicare
Hospital Insurance, known as Part A, helps pay for inpatient hospitals, home health, skilled
nursing facilities, and hospice care. Medicare Supplementary Medical Insurance, known as Part
B, helps pay for physicians, outpatient hospitals, home health, durable medical equipment, and
other services.5
In addition to using MACs to process and pay Medicare claims submitted for medical services,
CMS uses Unified Program Integrity Contractors to investigate instances of suspected fraud,
waste, and abuse in Medicare claims.
COVID-19 Accelerated and Advance Payments Program
On January 31, 2020, HHS declared that a COVID-19 public health emergency existed
nationwide as of January 27, 2020. On March 27, 2020, the CARES Act (P. L. No. 116-136) was
passed. The CARES Act expanded the AAP Program to relieve the pandemic-caused financial
strain on providers. CMS has referred to this expansion as the CAAP Program. The CARES Act
allowed CMS to promulgate CAAP Program eligibility criteria and repayment terms by providing
program instructions rather than through notice-and-comment rulemaking. The Continuing
Appropriations Act, 2021 and Other Extensions Act (P.L. No. 116-159) amended the CAAP
Program payment repayment terms.
COVID-19 Accelerated and Advance Payments Program Repayment Terms and
Recovery Process
Providers were allowed to repay their CAAP Program payments at any time by contacting their
MACs. However, providers were not required to start repayment for 1 year from the date of
the CAAP Program payments (repayment delay period). After the repayment delay period,
MACs begin the recovery process. Specifically, beginning at 1 year from the CAAP Program
payment date and continuing for 11 months, Medicare payments owed to providers were
recouped at a rate of 25 percent. After the 11 months, continuing for 6 months, Medicare
payments owed to providers were recouped at a rate of 50 precent. If the CAAP Program
payment to a provider was not fully recovered within 29 months, the MAC issued a demand
letter requiring the provider to repay the remaining balance.6 Once the demand letter was
5 Other Medicare parts (that are not relevant for this audit) are Medicare Part C and Medicare Part D.
6 29 months = 1-year repayment delay period + 11 months of 25 percent recoupment + 6 months of 50 percent
recoupment.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 3
issued, the remaining balance was considered an overpayment. If a provider disagreed with the
overpayment, it had 15 days to submit a CAAP Debt Dispute to the MAC before the MAC began
recouping 100 percent of the Medicare payments owed to the provider.7 In addition, if the
debt became delinquent, CMS referred the debt to the United States Department of the
Treasury’s (the Treasury’s) Debt Management Services for Cross Servicing and Offset of Federal
Payments.8, 9, 10
The demand letter provides guidance on how to request an extended repayment schedule
(ERS) for providers experiencing financial hardship. An ERS is a debt payment schedule that
allows a provider experiencing financial hardship to pay debts over 3 years, and an ERS may be
extended to as many as 5 years if specific extreme hardship criteria are met.11 A debt under
ERS (ERS debt) is considered delinquent if the provider misses one installment payment. If the
provider misses another payment following a delinquent status, the provider is considered in
default.12 Once a provider is in default, the MAC sends a notice of default to the provider
within 5 calendar days,13 suspends the ERS, and immediately resumes normal debt collection
procedures.14
The MAC must consider a provider’s request to reinstate the ERS, even after default. If
reinstated, the provider must be required to submit new documentation to determine
eligibility. The MAC must determine to reinstate the original ERS or revise the schedule, if
7 CMS details these repayment terms in a fact sheet, updated August 5, 2022, that is available online at:
https://www.cms.gov/files/document/covid-accelerated-and-advanced-payments-fact-sheet-08-04-22.pdf.
Accessed on May 5, 2024.
8 Delinquent debt means “a debt which the debtor does not pay or otherwise resolve by the date specified in the
initial demand for payment, or in an applicable written repayment agreement or other instrument, including a
post-delinquency repayment agreement” (45 CFR § 30.2).
9 Cross-servicing means “the program through which Fiscal Service provides delinquent nontax debt collection
services pursuant to 31 U.S.C. 3711(g)” (87 Fed. Reg. 50249 (August 16, 2022)).
10 Referral requirements are explained in The Medicare Financial Management Manual, Pub. 100-06, chapter 4.
For example, CMS must give the provider 60 days prior notice before referring the debt to the Treasury.
11 42 CFR § 401.607(c)(2).
12 The Medicare Financial Management Manual, Pub. 100-06, chapter 4, § 50.A.11. However, the regulatory
requirement, at 42 CFR 401.607(c)(2)(v), states that missing one installment payment constitutes a default.
Further, before the October 2023 update, The Medicare Financial Management Manual, Pub. 100-06, chapter 4,
stated that missing one installment payment constitutes a default.
13 Prior to an October 2023 revision, The Medicare Financial Management Manual, Pub. 100-06, chapter 4,
required that the MAC send a notice of default to the provider within 5 business days. Under Rev. 12346, CMS
changed this to 5 calendar days, effective Oct. 30, 2023.
14 The Medicare Financial Management Manual, Pub. 100-06, chapter 4, § 50.A.11.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 4
approved. If the schedule is revised, the MAC must ensure that the revised terms do not
extend the original and revised schedule beyond 60 months.15
The Continuing Appropriations Act, 2021 and Other Extensions Act, section 2501, required
providers to pay interest at 4 percent on overpayments.16 CMS informed providers that if the
repayment is not received within 30 days from the date of the demand letter, interest at the
rate of 4 percent will accrue from the date the demand letter was issued and will be assessed
each full 30-day period the balance remains unpaid.17
HOW WE CONDUCTED THIS AUDIT
Our audit covered $103.1 billion in total CAAP Program payments made to 46,364 providers.
We selected a stratified random sample of 100 providers that received CAAP Program
payments totaling $4.4 billion.18
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Appendix A contains the details of our audit scope and methodology, and Appendix B contains
the details of our statistical sampling methodology.
RESULTS OF AUDIT
CMS recovered the CAAP Program payments made to providers in compliance with the
repayment terms of the Continuing Appropriations Act, 2021 and Other Extensions Act and
other Federal requirements. As of the end of our fieldwork, for the 100 providers in our sample
that received $4.4 billion in CAAP Program payments, the MACs completed recovery from 97
providers. Of the remaining three, the MACs continued the recovery based on the approved
ERS for two providers and referred the remaining provider to the Treasury for debt collection.
(See Table 1.)
15 The Medicare Financial Management Manual, Pub. 100-06, chapter 4, § 50.A.12.
16 Federal regulations at 45 CFR § 30.18 authorize CMS to charge providers interest on overpayments not paid by
the date specified in the demand letter. This section provides that the Secretary must charge an annual rate of
interest that is determined and fixed by the Secretary of the Treasury, “unless a different rate is prescribed by
statute.”
17 See footnote 7.
18 The payment total was $4,402,151,971.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 5
Table 1: Recovery Status of 100 Providers in Our Sample
Recovery
Status
Number of
Sample
Providers
CAAP Program
Payments
Total
Recoveries
Balance
Remaining to
be Recovered
Completed
97
$4,382,635,639
$4,382,635,639
$0
Under ERS
2
19,069,957
18,503,001
566,956
Referred to the
Treasury
1
446,375
445,837
538
Total
100
$4,402,151,971
$4,401,584,477
$567,494
The total recovery as of the end of our fieldwork was $4.40 billion, and the balance remaining
to be recovered was $567,494.
COMPLETED RECOVERY FROM 97 SAMPLE PROVIDERS
MACs recovered the entire $4.38 billion in CAAP payments made to 97 of the 100 sampled
providers.
RECOVERY FROM TWO PROVIDERS IS IN PROGRESS BASED ON
EXTENDED REPAYMENT SCHEDULES
MACs continued the recovery of CAAP Program payments based on an approved ERS for two
providers. Specifically, from one provider that received $97,499 in CAAP Program payments,
the MAC recovered $20,842 through repayments and recoupments. For the remaining
overpayment of $76,657 plus interest, the MAC approved an ERS for 52 monthly payments
consisting of the first payment of $1,864 and the remaining 51 monthly payments of $1,608
each, effective April 1, 2023. As of the end of the fieldwork, this provider made every monthly
payment, and the balance due from the provider was $58,718.
From another provider that received $18,972,458 in CAAP Program payments, the MAC
recovered $17,205,607 through repayments and recoupments. For the remaining overpayment
of $1,766,851 plus interest, the MAC approved an ERS for 24 monthly payments of $76,725
each, effective November 15, 2022. As of the end of the fieldwork, this provider completely
made 17 monthly payments, partially made the 18th monthly payment due on April 15, 2024,
and the balance due from the provider was $508,238.
RECOVERY FROM ONE PROVIDER IS IN PROGRESS THROUGH THE TREASURY
A MAC referred the remaining provider to the Treasury for debt collection. Specifically, from a
provider that received $446,375 in CAAP Program payments, the MAC could not recoup
because the provider did not submit Medicare claims during the 17-month recoupment period.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 6
After sending demand letters and notices to the provider, the MAC referred the overpayment
to the Treasury. As of the end of the fieldwork, the Treasury collected $445,837 plus interest,
and the balance due from the provider was $538.
CONCLUSION
Based on our sample, we found that CMS recovered the CAAP Program payments made to
providers in compliance with the repayment terms of the Continuing Appropriations Act, 2021
and Other Extensions Act, and other Federal requirements. Therefore, we do not have any
recommendations.
We shared our draft report with CMS, and it informed us that it did not have comments.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 7
APPENDIX A: AUDIT SCOPE AND METHODOLOGY
SCOPE
Our audit covered $103,086,094,597 in total CAAP Program payments to 46,364 providers. We
selected a stratified random sample of 100 providers that received a total of $4,402,151,971 in
CAAP Program payments and reviewed the CAAP Program payment recovery from these
providers.
We did not assess CMS’s overall internal control structure during our audit. Instead, we limited
our review to CMS’s internal controls to ensure compliance with the CAAP Program payment
recovery requirements.
We conducted our audit from January 2023 to August 2024.
METHODOLOGY
To accomplish our objective, we:
• reviewed the CARES Act, the Continuing Appropriations Act, 2021 and Other Extensions
Act, other applicable Federal requirements, and CMS guidance;
• interviewed CMS officials to obtain an understanding of the CAAP Program payment
recovery processes;
• obtained from CMS a list of 46,364 providers that received CAAP Program payments
totaling $103,086,094,597;
• selected a stratified random sample of 100 providers (Appendix B) that received a total
of $4,402,151,971 in CAAP Program payments;
• obtained from the MACs the Healthcare Integrated General Ledger Accounting System
(HIGLAS) reports showing information on accounts receivables and HIGLAS downloads
(HIGLAS databases) showing repayment details, and recoupment details for each of the
100 sampled providers;19
• determined that CMS created accounts receivable records for the CAAP Program
payments by comparing the CAAP Program payment amounts seen in the sampling
frame with the accounts receivable information in HIGLAS reports;
19 HIGLAS is the centralized accounting system for the Federal financial accounting functions for all of CMS’s
programs.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 8
• determined the repayments made by the providers during the repayment delay period
by reviewing the repayment details in the HIGLAS databases;
• determined whether the MACs started recoupments immediately after the repayment
delay period and continued 25-percent and 50-percent recoupments until the CAAP
Program payments were fully recovered or the 17-month recoupment period ended,
whichever occurred first, by reviewing recoupment details in the HIGLAS databases;
• identified providers for whom the recovery was not completed by the end of the
17-month recoupment period, by comparing the total recovery amounts at the end of
the 17-month recoupment period and CAAP Program payment amounts;
• obtained from the MACs copies of demand letters that the MACs issued to providers,
and HIGLAS databases showing recoupments made after the date of the demand letters;
• determined whether the MACs either made 100-percent recoupments from or
approved ERS for providers whose CAAP payments remained as overpayments, by
reviewing the database showing recoupments made after the date of the demand
letters and ERSs;
• determined whether ERSs were appropriately approved by reviewing the
communications between the MACs and the providers and supporting documentation
that the providers submitted to the MACs;
• verified whether the MAC referred overpayments (for which the MAC did not receive an
ERS request) to the Treasury for collections by reviewing the referral letter and HIGLAS
database showing collections made through the Treasury; and
• discussed the results of our audit with CMS officials.
We shared our draft report with CMS, and it informed us that it did not have comments.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 9
APPENDIX B: STATISTICAL SAMPLING METHODOLOGY
SAMPLING FRAME
The sampling frame consisted of 46,364 providers that CMS indicated received CAAP Program
payments totaling $103,086,094,597.
SAMPLE UNIT
The sample unit was a provider.
SAMPLE DESIGN AND SAMPLE SIZE
We used a stratified random sample containing three strata as shown in Table 2:
Table 2: Sample Design and Sample Sizes
Stratum
Dollar Range of Sample Units
Number of
Sample
Units
Dollar Value of
Sample Units
Sample
Size
Minimum
Maximum
1
$4.90
$4,947,830.00
43,651
$19,021,723,342
33
2
4,959,240.00
51,862,424.52
2,261
39,822,013,317
33
3
51,877,170.00
522,801,000.00
452
44,242,357,938
34
Totals
46,364
$103,086,094,597
100
Strata were created based solely on the dollar value of the sample unit.
SOURCE OF THE RANDOM NUMBERS
We generated the random numbers using the OIG, Office of Audit Services, statistical software.
METHOD OF SELECTING SAMPLE UNITS
We sorted the items in each stratum in ascending order by the unique combination of three
fields: MAC jurisdiction, Provider Transaction Access Number, and Tax Identification Number
(in that order). We then consecutively numbered the items in each stratum in the sampling
frame. After generating the random numbers for our sample according to our sample
design, we selected the corresponding frame items to be reviewed.
ESTIMATION METHODOLOGY
We found that, of the 100 providers that we randomly selected, CMS appropriately recovered
the CAAP Program payments from 97 providers and continued the recovery from 3 providers
either through the approved ERS or referral to the Treasury in compliance with the Continuing
Medicare Payments Under the COVID-19 Accelerated and Advance Payments Program (A-05-23-00005) 10
Appropriations Act, 2021 and Other Extensions Act and other Federal requirements; as a result,
we made no estimates.