Advocacy Correspondence: HAP and HAP Member Letter to PA Congressional Delegation, COVID-19
July 21, 2020
Dear Members of the Pennsylvania Congressional Delegation:
Your swift action in passing significant coronavirus relief packages has provided crucial support to Pennsylvania hospitals in the face of the COVID-19 public health crisis. While the relief Congress has provided already has been enormously helpful and greatly appreciated, hospitals are still under perilous strain. As Congress considers additional COVID-19 relief, we ask for your support in granting full forgiveness of accelerated payments for all hospitals.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded the authority for Medicare accelerated payments to hospitals, which served as a mechanism to provide critically needed cash flow early in the response to COVID-19.
Under the program, accelerated payments function as a loan and must be repaid in full. Hospitals may receive an advance payment of as much as six months of revenue based upon past Medicare reimbursement. Beginning 120 days after the advanced payment is made, Medicare recoups the advance payments by offsetting all Medicare payments until the reimbursement obligation is fulfilled. For many Pennsylvania hospitals, any unpaid balance remaining after one year accrues interest at an annual rate of 10.25 percent. For hospitals receiving an advance payment during early April, recoupment of the repayment obligations will begin as early as August.
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. During April, HAP worked with Health Management Associates (HMA) to release a financial impact report, which estimated that Pennsylvania hospitals will incur losses and costs of more than $10 billion through the end of 2020.
Many hospitals around the state came into this crisis already operating on a razor’s edge and now are struggling to stay financially afloat. Providers will continue to face historic challenges throughout this extended public health emergency and beyond, particularly as we have seen during the last few weeks, the nationwide increase in cases of COVID-19 and with the threat of a second wave coinciding with flu season.
Providing full forgiveness of loan obligations associated with the expanded Medicare accelerated payment program will provide real, immediate, and necessary relief as hospitals and health systems deal with the fallout from the global pandemic amid a slow return of patients and uncertain dynamics during the weeks and months ahead.
Thank you for your service to our nation, our state, and our communities, and your attention to the needs of the hospital community during these challenging times.
Sincerely,
Allegheny Health Network
Allied Services Integrated Health System
Butler Health System
Clarion Hospital
Crozer-Keystone Health System
Doylestown Health
Einstein Healthcare Network
Excela Health
Friends Hospital Behavioral Health System
Geisinger
Good Shepherd Rehabilitation Network
Indiana Regional Medical Center
Jefferson Health
Lehigh Valley Health Network
Main Line Health
Penn Highlands Healthcare
University of Pennsylvania Health System
Penn State Health
Punxsutawney Area Hospital
St. Clair Hospital
St. Luke's University Health Network
Temple University Health System
Tower Health
UPMC
WellSpan Health
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Topics: Emergency Preparedness, State Advocacy
Revision Date: 7/21/2020
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