Medical practices face liability for COVID Accelerated and Advance Payments and PPP loan fraud enfor


The Centers for Medicare & Medicaid Services (CMS) announced last month that it will begin recovering payments from all Medicare providers and suppliers who requested and received COVID-19 Accelerated and Advanced Payments (CAAPs) from CMS during the COVID Public Health Emergency (PHE). Those repayments could have begun as early as March 30, 2021, depending upon the one-year anniversary of when the provider received the first CAAP installment payment.


CAAPs is not a new concept. The existing Accelerated and Advanced Payments Program, sometimes referred to as only AAPP to distinguish it from the CAAP-COVID program has existed for quite some time. The accelerated or advanced program was created to provide necessary funds following a disruption in claims submission and/or claims processing, such as national emergencies or national disasters.

The subsequent passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27, 2020, amended the existing accelerated payments program to provide additional benefits and flexibilities, including extended repayment timeframes, to the subset of providers specially referenced in the CARES Act:

• Hospitals

• Cancer hospitals

• Critical access hospitals

• Certain physician specialties, e.g., Primary Care, OB/GYN, Pediatrics, and other single and multi-specialty practices

The CARES Act has amended the CAAP repayment terms for all providers and suppliers who requested and received CAAPs during the COVID-19 PHE and established a lower interest rate of 4% for any demanded overpayments to recover CAAP balances, providing payment terms as follows:

• Repayment begins one year starting from the date you received your first CAAP

• CMS is authorized to recover this payment from Medicare payments due to providers and suppliers at a rate of 25% of each payment due to such providers for covered services

• At the end of the initial 11-month recovery period, CMS will continue to recover remaining CAAP payments at a rate of 50% for six months

• After the end of the six-month period, the providers Medicare Administrative Contract (MAC) will issue a demand letter for full repayment of any remaining balance and, if payment is not received within 30 days, interest will accrue at the rate of 4% from the date of the issuance of the demand letter.

Online resources for CAAP issues:

• MLN Matters – Repayment of COVID-19 Accelerated and Advance Payments:

• Fact Sheet: Repayment Terms for Accelerated and Advance Payments:

• Accelerated and Advance Payment Repayment FAQs:

These links, and the Department of Justice link in the following section, are active in this article as posted on the ACMS website.

Justice Department action against COVID-19 fraud

In addition to the inception of the CAAP repayment, the Department of Justice announced, also last month, an update of the criminal and civil enforcement to combat COVID-19 related fraud, including schemes targeting the PPP and unemployment and various loan programs. As of the time of the announcement, DOJ had charged 474 defendants with criminal offenses based upon fraud schemes connected to the COVID-19 pandemic.

Of most interest to physicians will be the actions the Department of Justice has taken against medical providers charged with PPP fraud. The cases involve a range of conduct, from business owners who have inflated their payroll expenses to obtain larger loans than legally available, to serial fraudsters who revived dormant corporations and submitted multiple identical loan applications.

• Justice Department Takes Action Against COVID-19 Fraud:

Mr. Cassidy is a shareholder at Tucker Arensberg and is chair of the firm’s Healthcare Practice Group; he also serves as legal counsel to ACMS. He can be reached at (412) 594-5515 or mailto:[email protected].