WASHINGTON –U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) said that legislation they support to provide financial relief to health care providers working on the frontlines of the coronavirus (COVID-19) pandemic has become law. The legislation provides flexibility for a Medicare loan program that has supported health care providers during the pandemic.
To date, the Medicare Accelerated and Advance Payments Program has provided approximately $100 billion in payments to health care providers to help alleviate financial stress caused by the pandemic. These upfront payments have been critical to supporting hospitals, nursing facilities, physician practices and other health care providers. However, repayment of these loans was scheduled to begin in August, despite the fact that hospitals are still experiencing ongoing COVID-19 related revenue challenges. This new law will provide relief for health care providers by reducing the interest rate on these loans and granting providers more time to repay the loans.
“As the pandemic continues to spread across America, we must strengthen our rural hospitals and rural health care systems,” Klobuchar said. “Rural health care systems are on the front lines of combating the coronavirus, but many are facing shortages of critical resources that they need to treat patients. That is why I support legislation to provide relief for rural hospitals and ensure that Minnesotans can continue to have access to health care services during this pandemic and beyond.”
“As we all work to combat the coronavirus, I think about how important Minnesota health care providers are, and I’m grateful for the care they’re providing to keep millions of people healthy. We need to provide them with relief–particularly small and rural hospitals–and we need to do it now,” said Sen. Smith, a member of the Senate Health Committee and leader of the bipartisan Senate Rural Health Caucus. “This legislation will help health care systems better manage ongoing health care revenue challenges due to the pandemic.”
As a result of the legislation, hospitals will now be able to delay repayment requirements under this program for one year after a hospital or other provider received their first payment. After year one, Medicare would recoup 25% of funding from providers who haven’t repaid their loans for 11 months. After 23 months, Medicare would recoup 50% of funding from providers who haven’t repaid their loans. And after 29 months, providers would work with CMS on a repayment plan if they still aren’t able to pay back their loans. The bill also reduces the interest payment rate to 4%, and it makes the rules applicable to both Medicare Part A and Part B providers.