President Trump on Oct. 1 signed a bill to keep the federal government running through Dec. 11. This “continuing resolution” (CR), which was approved by the House by a 359-57 vote and the Senate by a 84-10 vote, includes provisions to delay repayment by physicians of pandemic-related Medicare loans and to reduce the loans’ interest rate.
In an earlier news release, the American Medical Association reported that Congress and the White House had agreed to include the provisions on Medicare loans in the CR.
Under Medicare’s Accelerated and Advance Payments (AAP) Program, the Centers for Medicare & Medicaid Services (CMS) advanced funds to physicians who were financially impacted by the pandemic.
Revisions were made under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to broaden the existing program to supply provider relief related to the public health emergency. The program was revised in March but suspended accepting new applications related to the pandemic in late April.
Physicians who received APP loans were required to begin repayment within 120 days after the loan disbursement. CMS planned to recoup the advances by offsetting them against Medicare claims payments due to physicians. Practices had up to 210 days (7 months) to repay the loans through this process before being asked to repay them directly with a 10.25 % interest rate.
For practices that received these advances, their Medicare cash flow was scheduled to dry up, starting in August. However, CMS quietly abstained from collecting these payments when they came due, according to Modern Healthcare.
New terms
Under the new loan repayment terms in the CR, repayment of the disbursed funds is postponed until 365 days after the date on which a practice received the money. The balance is due by September 2022.
The amount to be recouped from each claim is reduced from 100% to 25% of the claim for the first 11 months and to 50% of claims withheld for an additional 6 months. If the loan is not repaid in full by then, the provider must pay the balance with an interest rate of 4%.
More than 80% of the $100 billion that CMS loaned to health care providers through May 2 went to hospitals, Modern Healthcare calculated. Of the remainder, specialty or multispecialty practices received $3.5 billion, internal medicine specialists got $24 million, family physicians were loaned $15 million, and federally qualified health centers received $20 million.
In the AMA’s news release, AMA President Susan Bailey, MD, who assumed the post in June, called the original loan repayment plan an “economic sword hanging over physician practices.”
The American Gastroenterological Association has been advocating for more flexibility for the financial assistance programs, such as the Accelerated and Advanced Payment Program and the Paycheck Protection Program, that physicians have utilized. It is critical to give physicians leeway on these loans given that many practices are still not operating at full capacity.
Based on reporting from Medscape.com.
