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Hospital Community Continues to Push for Timely Relief from Accelerated Payments

August 18, 2020

Hospitals are urging action by policymakers in Washington, D.C. as loans provided under the Medicare Accelerated and Advance Payment Programs are scheduled to start to be repaid, many as early as the end of this month. Recoupment of the loans will be made in the form of lost Medicare payments, at a time when hospitals are still absorbing the significant financial impact of COVID-19, facing reduced revenue as patients remain reluctant to seek care, and preparing for a potential resurgence of COVID-19 during the fall and winter.

Without federal action, hospitals will receive no new Medicare reimbursements during their repayment periods until they have fully repaid their accelerated payments, resulting in an average loss of approximately 25 percent of their payments overall. Given the serious financial impact, hospitals have called on the Centers for Medicare & Medicaid Services (CMS) to use administrative authority to delay recoupment of the accelerated payment loans, while working in a parallel effort to secure the enactment of legislation to provide loan forgiveness.

Congress is in the process of negotiating a fifth COVID-19 relief package to address the public health crisis and offer economic stimulus to remain at a standstill. The House-passed HEROES Act and Senate-proposed HEALS Act both included policy demonstrating Congress’ clear intent to adjust the repayment terms of the accelerated payment program.

However, Congressional negotiations have come to a standstill and legislation is not expected to move forward until September. National hospital associations, including the American Hospital Association, have urged action by CMS and the White House until congress acts. In a letter to Congressional leaders this week, the Federation of American Hospitals emphasized, “Rural hospitals are particularly at risk given that they tend to serve older, higher-risk populations and rely heavily on Medicare reimbursement.”

During July, 24 Pennsylvania hospitals and health systems, representing 143 facilities across the commonwealth issued a letter, calling on the Pennsylvania Congressional Delegation for full forgiveness of Medicare accelerated payments.

The letter emphasized that given the scope of the losses due to COVID-19, including the cancellation of scheduled procedures, increased PPE procurement costs, and a hesitancy among patients to return for care, hospitals and health systems are on precarious financial footing.

The timing of the scheduled repayments places Pennsylvania hospitals under additional financial strain just as they are trying to get their feet back under them and preparing for the months ahead.

Please contact Laura Stevens Kent, HAP’s senior vice president, strategic integration, with questions regarding HAP’s federal advocacy work in support of Pennsylvania hospitals.