FAH demands more time for providers to repay advance Medicare payments due soon

A picture of a hospital corridor
The Federation of American Hospitals is asking for major changes to the repayment terms for advance and accelerated Medicare payments. (sfam_photo/Shutterstock)

The Federation of American Hospitals is imploring Medicare to give providers more time to repay advanced Medicare loans sent out to help providers facing a financial crisis from COVID-19.

The hospital group launched a new initiative Wednesday called “Time is Running Out” to highlight a 45-day deadline for providers to repay loans even though many are still struggling financially.

“For most hospitals, this deadline is fast approaching, well before experts expect a return to pre-pandemic patient volumes or revenues, and as many communities are experiencing spikes in COVID-19 cases,” a report from FAH said.

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The Medicare Accelerated and Advance Payment Program gives providers loans in the form of advanced Medicare payments and they have a year to repay them. However, hospitals must start repaying the funds within 120 days by forgoing any Medicare fee-for-service payment.

While the program’s loans helped keep providers afloat, “if the loan repayment terms aren’t fixed, the lifeline could become an anchor that sinks the recovery of hospitals across the country,” said FAH President and CEO Chip Kahn in a statement.

FAH wants Congress to make a series of changes to the payment program, including:

  • Extending the start of the repayment of loans from 120 days to a year.
  • Reducing the amount of repayment taken from each Medicare claim from 100% to 25%.
  • Authorizing loan forgiveness if there is major hardship.
  • Waiving the interest rate now at 10% or limit it to more than 1%. The interest rate goes into effect if the loan hasn’t been repaid in one year.
  • Increasing the amount of Medicare payments that can be given to hospitals from three to six months.
  • Resuming the advance payment program that was suspended in late April.

But it remains unclear when Congress will take up the issue.

Congress has passed $175 billion in relief funding to providers. However, the Senate has not taken up a $3 trillion House bill that gives another $100 billion to providers.

The Centers for Medicare & Medicaid Services gave out $100 billion in advance payments to providers who have been wracked by plummeting patient volumes and the cancellation of elective procedures due to the pandemic.

CMS said back on April 27 that it was suspending the advance payment program to reevaluate the amounts that will be paid under it.