Hospitals must repay Medicare for $100B pandemic lifeline

CMS accelerated Medicare payments to hospitals and other providers at the beginning of the COVID-19 pandemic to help temporarily relieve financial pressure. It's time for hospitals to begin repayment, but many are still facing financial strain tied to the pandemic. 

Here are six things to know about the Medicare advance payments: 

1. CMS expanded the Accelerated and Advance Payment Program in late March to help offset financial damage caused by the COVID-19 pandemic. CMS announced April 26 that it was reevaluating pending and new applications for advance payments due to the availability of funds under the Coronavirus Aid, Relief and Economic Security Act. 

2. As of May, CMS had paid out $100 billion in advance payment, the bulk of which went to hospitals. 

3. Hospitals and other healthcare providers are required to start repaying the advance payments this month. Most hospitals will have one year from the date the first loan payment was made to repay the loans, according to Kaiser Family Foundation. 

4. Payments for new Medicare claims will be offset to repay the loans. If the loans are not repaid within one year, an interest rate of about 10 percent will begin to be charged, according to KFF. 

5. Because some hospitals continue to experience cash flow issues due to the pandemic, Congress is being asked to consider a COVID-19 relief package that would extend the timeline for repaying the Medicare loans, according to KFF. 

6. The American Hospital Association is urging Congress to forgive the loans for all hospitals. The Federation of American Hospitals sent a letter Aug. 18 urging Congress to request that CMS and the Trump administration delay recoupment of Medicare advance payments. "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 FAH's letter states. 

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