NEW: Shaheen, Bennet Announce Legislation to Improve Medicare Payments Program and Provide Financial Relief for Health Care Providers on Frontlines of Coronavirus Pandemic

May 12, 2020

(Washington, DC) – U.S. Senators Jeanne Shaheen (D-NH) and Michael Bennet (D-CO) announced today that they’ll introduce legislation to reduce interest rates and modify repayment obligations for health care providers who’ve sought financial assistance amid the coronavirus pandemic through Medicare’s Accelerated and Advance Payments Program. This program was expanded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to allow for hospitals, physicians and other Medicare-participating providers to apply for upfront payments from Medicare to help cover revenue shortfalls as a result of COVID-19. To date, New Hampshire providers have received $689 million in upfront payments through this program to mitigate the economic shortfall caused by the pandemic. Across the nation, this program has delivered more than $100 billion in upfront payments to health care providers. Representatives Brad Schneider (IL-10) and Ron Kind (WI-3) will introduce companion legislation in the House.

“Providers in New Hampshire have furloughed hundreds of workers and facilities are teetering on the edge of shutting down. This would be a health care crisis during normal times, but in the middle of a public health emergency of this nature, it’s dangerous and unsustainable,” said Senator Shaheen. “Responding to the full scope of this crisis demands an all-hands-on-deck approach, and this change to Medicare’s Accelerated and Advance Payments Program is a commonsense step to provide financial relief and certainty to providers relying on this program. I’ll fight to include my legislation in future COVID-19 relief efforts to ensure Granite State providers and others throughout the country that utilize this program aren’t forced to endure undue financial strain.”

“The coronavirus pandemic has strained every level of America's health care system and the budgets of providers across Colorado have been buckling as they work tirelessly to care for our communities,” said Senator Bennet. “We need to provide our hospitals and physicians with the flexibility and stability they need so that they can continue to provide essential health care. By reducing interest rates, easing repayment obligations, and allowing forgiveness, our reforms to the Medicare Accelerated and Advance Payments Program will give providers much-needed relief.”

Rather than allowing a gradual repayment, the program currently requires the Centers for Medicare and Medicaid Services (CMS) to withhold 100 percent of otherwise applicable payments owed to providers for Medicare services in order to pay back the upfront payment, starting as soon as just four months after the upfront payment is made. Equally concerning, if these upfront payments are not recouped within certain timeframes (e.g. within year for hospitals) after the upfront payment was made to the health care provider, CMS is required to charge significant interest on the remaining balance owed by the provider. Based on current Treasury regulations and rates, the applicable interest rate is set as high as 10.25 percent for repayment of Medicare’s accelerated and advance payments for hospitals, physicians and other health care providers who have not completed repayment by the applicable due date.

Shaheen and Bennet’s legislation would delay the start of the withholding period and the commencement of interest accrual, while also limiting the portion of Medicare reimbursement for services that can be withheld to pay down the upfront payment to 25 percent of the otherwise applicable payment for the service. The bill would limit the interest rate to 1 percent for remaining balances that have not been paid back through withholding after two years. The legislation would also authorize CMS to forgive remaining balances owed by providers in cases of hardship.  To help ensure that the Medicare Accelerated and Advance Payments Program does not harm Medicare’s solvency or Medicare premiums, the bill requires the Department of the Treasury to work with CMS to hold the Medicare trust funds and Medicare premiums harmless.

The legislation is supported by the American Medical Association and the Federation of American Hospitals.

Additional cosponsors of this legislation include Senators Smith (D-MN), Cortez Masto (D-NV), Hassan (D-NH), Jones (D-AL), Reed (D-RI), Blumenthal (D-CT), Heinrich (D-NM), Manchin (D-WV), Durbin (D-IL), Klobuchar (D-MN), Warren (D-MA) and Rosen (D-NV). A copy of the legislation can be found here.

In April, Shaheen led a bipartisan call with Senator Bill Cassidy (R-LA), urging CMS to modify the program’s interest rates and extend the period of time for upfront payments to be paid back in full. 

Senator Shaheen has fought to secure additional funding and supported numerous efforts to help Granite State health care providers on the frontlines of the COVID-19 outbreak. Congress recently passed a fourth coronavirus response bill to replenish federal funds for small business assistance programs, bolster support for hospitals and providers on the frontlines and to ramp up testing for COVID-19. This legislation includes an additional $75 billion in health care provider grants. In total, Congress has now provided $175 billion for grants for health care providers.