Trump signs short-term govt funding bill that alters Medicare loan repayment terms

Congress getty images 1
Congress and President Trump passed a law that funds the federal government through December, but also includes key changes to repayment terms for the Medicare Accelerated and Advance Payment Program. (Getty Images)

President Trump signed into law late Wednesday a short-term government funding bill that includes changes to repayment terms for certain providers for COVID-19 loans.

The continuing resolution, which funds the government through Dec. 11, includes new deadlines for participants to repay loans from the Medicare Advance and Accelerated Payments program. The program enabled hospitals and certain providers in Part A and suppliers in Part B to get advance loans to cover major financial hits caused by the pandemic.

“Medicare accelerated and advanced payments have been a lifeline to many hospitals and health systems in the fight against this historic pandemic, allowing them to continue to deliver the care that their patients and communities depend on,” said American Hospital Association President and CEO Rick Pollack in a statement after Congress passed the bill on Wednesday.

CMS had doled out more than $100 billion in advance loans to providers at the onset of the pandemic. The agency suspended the program in April.

But the loans started to become due starting on Aug. 1. CMS could garnish Medicare payments to such providers to repay the loans.

The pressing deadline alarmed provider groups who say their members are still suffering from the financial crisis caused by COVID-19.

Hospital volumes plummeted in March and April as states required facilities to cancel elective procedures to preserve capacity to fight COVID-19. Patients were also very reluctant to go to a hospital.

While patient volumes rebounded in the months afterward, the numbers are still below pre-pandemic levels.

The bill would give hospitals one year before Medicare can claim their payments to repay the loans. Other providers in Part A and suppliers in Part B will have up to 210 days.

Providers will also have 29 months since their first payment to fully repay the loan, as opposed to the prior deadline of one year.

The bill also lowers the interest rate for such payments down to 4%.

The funding bill also delays a $4 billion payment cut to hospitals that offer a large amount of charity care. The cuts to disproportionate share hospitals was mandated by the Affordable Care Act but has been delayed by Congress.

The payments will now go into effect on Dec. 11 after the funding bill expires, and AHA is pressing Congress for a delay to the cuts for the entirety of the 2021 federal fiscal year, which starts Thursday.