Durbin, Colleagues Announce Bill To Improve Medicare Payments Program And Provide Financial Relief For Health Care Providers On Frontlines Of COVID-19

WASHINGTON – U.S. Senator Dick Durbin (D-IL) joined Senators Jeanne Shaheen (D-NH) and Michael Bennet (D-CO) today to announce 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, Illinois providers have received $4.3 billion 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.

“Making this change to Medicare’s Accelerated and Advance Payments Program will help health care providers and hospitals in Illinois get financial relief as they adjust operations to combat COVID-19.  It’s imperative that we keep hospitals and other health care providers on financially stable grounds in the months ahead as we face the challenges this pandemic presents us,” Durbin said.

U. S. Representatives Brad Schneider (D-IL-10) and Ron Kind (D-WI-3) introduced companion legislation in the House.

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.

Durbin, 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 Tina Smith (D-MN), Catherine Cortez Masto (D-NV), Maggie Hassan (D-NH), Doug Jones (D-AL), Jack Reed (D-RI), Richard Blumenthal (D-CT), Martin Heinrich (D-NM), Joe Manchin (D-WV), and Amy Klobuchar (D-MN).

A copy of the legislation can be found here.