August 18, 2020 | FAH Policy Blog Team
WASHINGTON – The Federation of American Hospitals (FAH) sent a letter to congressional leaders today urging Congress to request that CMS and the Trump administration formally delay recoupment of payments providers received under the Medicare Accelerated and Advance Payment Programs (MAAPP).
MAAPP provided lifesaving loans to hospitals and providers in the form of advance Medicare fee-for-service payments. Most providers are scheduled to begin repaying these loans this month in the form of lost Medicare payments.
Intervention is needed to prevent the halt of ALL Medicare fee-for-service payments to participating hospitals and providers, further straining health care providers across the country as hospitals will lose an average of approximately 25 percent of their payments. Rural facilities are particularly at risk with many relying heavily on Medicare reimbursements and already facing financial ruin amid the worst public health emergency in recent memory.
While FAH greatly appreciates Congress’ swift leadership in passing relief bills, such as the CARES Act, more must be done to prevent the loss of these vital Medicare payments. The letter, sent to House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Mitch McConnell (R-KY), House Minority Leader Kevin McCarthy (R-CA) and Minority Leader Charles Schumer (D-NY) urges Congress to call on CMS and the White House to take action in the short-term to formally delay recoupment of the MAAPP loans and to provide guidance to health care providers. While the programs are intended as loans that would be repaid, the effects of starting repayment while the pandemic is still ongoing could be disastrous.
“Although Congress’ expansion of this program in the CARES Act successfully prevented short-term cash flow concerns for many hospitals, the onerous repayment terms were not created with the current pandemic in mind,” the letter says. “Until Congress has had an opportunity to enact legislation, we urge you to immediately call on CMS and the White House to exercise their administrative authority to formally delay recoupment of MAAPP loans – with public guidance to providers.”
In addition to the immediate ask to urge CMS to use its administrative authority, the FAH letter also urges Congress to enact several changes to the MAAPP repayment terms in the next COVID-19 legislative package, including:
- Extending the start of repayment of the loans from 120 days to at least 12 months – no earlier than April 2021
- Reducing the amount of repayment taken from each Medicare claim during repayment from 100% to 25%
- Extending the repayment period from 12 months for hospitals (or 210 days for other providers) to a minimum of 36 months before providers must pay the outstanding balance and before interest begins to accrue
- Waiving the interest rate or at least limit it to no more than 1 percent
- Resuming the program, which was paused on April 27
- Increasing the amount that can be advanced to hospitals from three or six months of Medicare payments to 12 months of Medicare payments
- Allocating the funds from general Treasury revenues rather than from the Medicare Hospital Insurance Trust Fund
- Authorizing loan forgiveness in cases of severe distress
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