Rep. Schneider to CMS: Delay COVID-19 Loan Repayment

Aug. 19, 2020

U.S. Rep. Brad Schneider (IL-10) sent a letter today to Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma urging the agency to take immediate action to delay repayment of loans made to hospitals and other providers through the Medicare Accelerated and Advance Payment (AAP) programs. Current repayment terms require hospitals to begin repaying funds 120 days after receipt of the loan, which means that many Illinois hospitals were scheduled to begin repayment this month in the form of a 100% offset to new Medicare fee-for-service claims.

“We are writing you today on behalf of our nation’s hospitals, physicians, and health care providers to ensure their financial stability through the COVID-19 pandemic. As Congress continues to negotiate the next COVID-19 response legislation, we urge you to take immediate action to delay recoupment of funds provided through the AAP program, as well as reduce the amount of payment taken from each Medicare claim during recoupment from its current 100 percent,” said Rep. Schneider and Rep. Ron Kind (D-WI), who co-signed the letter.

“Our providers remain on the front lines of this pandemic, caring for our most vulnerable and ensuring the virus remains contained. However, their timely response has often come at the expense of their financial security. A recent report found that the COVID-19 pandemic will result in at least $323 billion in losses to hospitals and health systems in 2020. We request that CMS use their authority to delay recoupment of AAP loans until a legislative solution is reached. We also request that, when recoupment resumes, CMS reduce the percentage of claims offset to 25 percent, as compared to the current 100 percent and identical to the House-passed HEROES Act. In doing so, CMS should issue clear, written guidance to Medicare Administrative Contractors and providers regarding recoupment procedures. Such actions would give providers and suppliers the certainty they urgently need to continue to maintain access to services amidst unprecedented challenges and financial strain.”

IHA strongly supports action to improve AAP programs, as highlighted in the list of IHA COVID-19 legislative priorities for the next pandemic-response package. Illinois hospitals and other providers received over $4 billion in loan dollars through the AAP programs.

In May, Rep. Schneider, who serves on the health subcommittee of the House Ways and Means Committee, introduced the Medicare Accelerated and Advance Payments Improvement Act, legislation, which would ease repayment terms through statute.