In passing a bipartisan funding bill last week to avoid a possible government shutdown, the U.S. Senate officially restructured and relaxed repayment terms for the Medicare loans taken out by home health providers in spring.
President Donald Trump signed the funding bill into law on Wednesday, just two days before being flown to Walter Reed Hospital due to COVID-19-related health concerns.
The continuing resolution funds the government through Dec. 11. As it pertains to Medicare loans, it creates new deadlines for home health providers, skilled nursing facilities (SNFs) and others to repay any advance and accelerated payments received in 2020.
“This makes real accommodations for providers,” Judy Waltz, a partner at Milwaukee, Wisconsin-based law firm Foley & Lardner LLP, previously told Home Health Care News.
Overseen by the U.S. Centers for Medicare & Medicaid Services (CMS), advance and accelerated payments are meant to keep Medicare-reimbursed health care organizations afloat during turbulent times. Since the start of the COVID-19 emergency, CMS has disbursed more than $100 billion in such loans.
Overall, home health providers received $1.7 billion in loans before CMS suspended the advance and accelerated payment programs in late April. Short-stay hospitals, comparatively, received more than $78 billion.
“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,” American Hospital Association President and CEO Rick Pollack said in a statement.
Under normal conditions, Medicare providers were supposed to begin paying back their loans on Aug. 1 — or risk CMS withholding reimbursement for any unpaid debts. August came and went, however, without CMS garnishing any payments.
At the time, CMS Seema Verma suggested the agency expected Congress to address the issue directly.
The recently finalized funding bill now gives hospitals one year before Medicare can claim their payments to repay the loans. Other Medicare providers will have up to 210 days.
Providers will have 29 months since their first payment to fully repay the loan; they previously only had one year under the original deadline. Additionally, the measure lowers the interest rate on outstanding payments from 10.25% to 4% .
Industry advocates and trade associations have tried to get accelerated payments forgiven entirely, but that was never really an option, Waltz previously noted.
“Medicare can’t just access more money or do whatever Congress does to pay for the federal debt,” she said. “It’s very specific to the trust funds, so the idea of a forgiveness wasn’t realistic.”