The House passed a short-term government funding bill that extends the deadline for providers to start repaying Medicare advance payment loans to the end of the COVID-19 public health emergency.
The bill that the House passed late Tuesday is a major win for provider groups who worried they could struggle to repay the Medicare loans starting in August. The bill still has to pass through the GOP-controlled Senate.
The continuing resolution, which funds the federal government through Dec. 11, also lowers the interest rate for payments made under the Medicare Accelerated and Advance Payment Program to 4%, down from 10.25%.
The Centers for Medicare & Medicaid Services (CMS) gave out more than $100 billion in advance payments in March to providers slammed by the pandemic. The payments are essentially loans which CMS recoups by garnishing Medicare payments to providers. That process starts 120 days after the first payment was received.
But the bill would give providers one year before Medicare can claim their payments.
It would also give providers 29 months since the first payment to fully repay the loan amount. Currently, CMS gives providers a year to fully repay.
In addition to the changes to the repayment terms, the bill also delays $4 billion in payment cuts to disproportionate share hospitals that were supposed to go into effect as part of the Affordable Care Act. The cuts will now be delayed until December.
The bill earned plaudits from the hospital industry, which has pressed Congress for help as providers are still struggling with the pandemic and could not afford to have Medicare payments become garnished.
“Our hospitals continue to suffer high costs and revenue losses associated with COVID-19, and they welcome the relief this continuing resolution would provide,” said Bruce Siegel, president and CEO of America’s Essential Hospitals, which represents safety net hospitals.
The Federation of American Hospitals said earlier this week before the House vote that the advance payment program is a “vital lifeline to hospitals and healthcare providers during the pandemic that has enabled hospitals and providers to maintain access to critical patient care. But the ongoing pressures of the current crisis required a revision of the repayment terms.”
The bill, which has approval from the White House, now heads to the Senate. The chamber must reach a decision on the legislation to avoid a government shutdown when funding runs out on Sept. 30.