- CMS will start getting back accelerated Medicare loans it sent as COVID-19 relief as early as Monday, a spokesperson confirmed to Healthcare Dive, despite fears that the financial burden on hospitals and doctor’s offices is exacerbating the worsening pandemic could.
- Providers who have received credit will not receive Medicare refunds from their claims until the amount of credit they received has been reduced to zero. Hospital groups have asked the Trump administration and Congress to either extend the loans or relax repayment terms without any easing.
- CMS made more than $ 100 billion in loans to providers as of late March and suspended the program after about a month, citing the $ 175 billion tranche of grants made available to providers by Congress.
The Medicare Accelerated Payments and Prepayments program accelerates Medicare payments to providers in an emergency based on historical payments. It was a godsend to reduce the immediate financial pressure on the providers, but the narrow repayment window sparked calls from the providers for further administrative relief.
However, CMS emphasizes that when an emergency disrupts claims filing or processing, the loans are designed to keep providers and suppliers afloat, and not grants like other COVID-19 funds. Most providers can claim up to 100% of their Medicare payment amount for a period of three months and begin repaying 120 days after payment through CMS.
One day after this deadline, CMS will automatically deduct Medicare fees for services from any new claims submitted until the loaned funds are repaid.
The majority of hospitals are required to repay the full balance of their loan one year after it was issued. Other Medicare Part A providers have a total of 210 days to repay the entire balance of the loan.
Medicare fees for services averaged about a quarter of a U.S. hospital’s revenue, and losing that source of income could be really damaging for providers, hospital lobbies say – especially as COVID-19 cases rise again and the $ 4 million mark Earlier this month.
The American Hospital Association estimates US hospitals could lose $ 323 billion this year to the pandemic.
The lobby, along with its sister groups, is pushing for Congress to extend the loans in its next round of COVID-19 relief laws to be negotiated on Capitol Hill or looser repayment restrictions like postponing the deadline, lowering the interest rate on loans, or reducing the repayment amount per claim from the total claim to a quarter of it.
The final form of this legislation is unclear, but the Democrat-backed Omnibus Emergency Resolutions Act (HEROES) for Health and Economic Recovery A measure passed by Parliament in May would take some of those measures, including more favorable loan terms, a longer repayment period and a lower repayment rate per claim.
However, CMS says it offsets legal requirements to collect the debt to get cash back into the country besieged Medicare trust fund with the financial needs of the provider. The hospital fund could dry up due to the increasing burden on the program as early as 2026, an impending financial crisis likely to be exacerbated by COVID-19.
Much like the $ 175 billion congressional grants paid out to providers, the Trump administration continued to face criticism for how it made the Medicare loans, with the majority going to hospitals better positioned to handle the crisis deal with.
Acute care and hospitals with critical access received more than 80% of the loans, while single or multiple group practices received $ 3.5 billion and family practices received $ 15 million.