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AAMC Supports Legislation to Improve Medicare Accelerated and Advance Payments

July 16, 2020

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Allyson Perleoni, Senior Legislative Analyst

In a July 13 letter to Senate lawmakers, the AAMC endorsed the Medicare Accelerated and Advance Payments Improvement Act of 2020 (S. 3750/H.R. 6837), a measure that would modify the recoupment terms of provider loans authorized in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) [see Washington Highlights, March 27].

In the letter, AAMC Chief Public Policy Officer Karen Fisher thanked Sens. Jeanne Shaheen (D-N.H) and Michael Bennet (D-Colo.) and Reps. Brad Schneider (R-Ill.) and Ron Kind (D-Wisc.) for introducing the Medicare Accelerated and Advance Payments Improvement Act of 2020 (S. 3750/H.R. 6837).

The bill would modify the terms of the Medicare Accelerated and Advance Payment Programs by allowing the Department of Health and Human Services Secretary, at the request of a hospital or physician practice, to not recoup payments from Medicare claims for one year, require that claim recoupment not exceed 25% of the claim, lower the interest rate of the loans, and allow at least two years before outstanding balances must be paid. If enacted, the legislation would also give the secretary the authority to waive repayment if entities apply for a waiver and meet specific criteria.

In the letter, Fisher said that “the Medicare Accelerated and Advance Payment Programs have provided important financial resources to many hospitals and physicians, including teaching hospitals and faculty practice plans, to help ensure these providers can continue operating throughout the pandemic by providing loans in the form of financial advances on providers’ future Medicare payments.” She then explained that “due to the long-term nature of the crisis, improvements must be made to the Medicare Accelerated and Advance Payment Programs to ensure that hospitals and physicians can continue to sustain a vigorous response to the pandemic; maintain the necessary health care workforce; and ensure that patients can continue to get the testing, treatment, and care they need.”

The legislation comes in response to concern from hospitals and physician practices who applied for and received loans through the Medicare Accelerated and Advance Payment Programs that the terms of recoupment of the loans are unsustainable. Under current law, some providers will be required to begin repaying the loans through 100% recoupment of Medicare claim payments as soon as August if they are unable to pay the full amount back within 120 days of receipt of the loan. The loans are also subject to an interest rate of over 10% if not paid back in full within 210 days.

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