House passes funding bill with relaxed Medicare loan repayment terms

The House unanimously approved a short-term funding bill Sept. 22 to avert a government shutdown next week. Relaxed terms for Medicare accelerated loan repayments are included in the bill.

Six things to know:

1. The bill would extend the start date for when CMS would begin recouping the Medicare accelerated payments that were given to providers this spring to help offset coronavirus-related financial damage.

2. Providers would have one year after the Medicare advance payment loan was issued before CMS would begin withholding payments to recoup the funds. This extends it from 120 days.

3. The bill also increases the timeline for hospitals to repay the loan in full before interest will accrue. Hospitals would also have 29 months to repay the loan, up from 12 months under current law.

4. In the bill, the interest rate is also lowered to 4 percent, down from about 10 percent

5. In addition, the repayment rate would be lowered. Terms suggest recoupment would begin at a rate of 25 percent for the first 11 months and 50 percent for the following six months. 

6. The bill comes after hospitals across the U.S. have asked Congress to consider a relief package or bill to extend the timeline as some of them continue to experience cash flow issues due to the pandemic.

More articles on healthcare finance:
Cook County Health seeks $23M funding boost to help reverse some cuts
Outlook remains negative for US for-profit hospitals, Moody's says
9 hospitals ending services, closing departments

© Copyright ASC COMMUNICATIONS 2021. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.