Hospitals urgently need Medicare Accelerated and Advance Payment Program loan forgiveness
These loans provided hospitals a lifeline in the midst of a crisis; their forgiveness will bring hospitals one step closer to recovery.
Nearly three months after COVID-19 hospitalizations peaked in New York, our hospitals remain in urgent need of federal relief. The fight against this virus is not over. New York hospitals are working tirelessly to secure personal protective equipment, medications and more to prepare for a second wave. This preparation comes with significant costs at a time when supplies are low, costs are high and hospitals’ finances have been devastated.
Right now, Congress and the president have the opportunity to support our hospitals in a critical way: forgive high-interest pandemic-related loans to our financially-stressed hospitals.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law on March 27, included a provision that allowed hospitals to receive advanced payments from Medicare. These expedited payments provided a lifeline to New York hospitals at a critical moment. Early in this pandemic, New York’s hospitals made enormous financial investments to prepare for and treat New York coronavirus patients, and they froze all of their elective procedures. Though COVID-19 hospitalizations have declined in New York, our hospitals continue to experience extraordinary costs and revenue losses to this day.
Many of New York’s hospitals accessed Medicare accelerated payments this spring as COVID-19 cases surged throughout the state. Unfortunately, repayment is due to begin 120 days after these payments were disbursed and hospitals will be expected to repay them at an interest rate of nearly 10%.
While New York’s hospitals have received significant federal funding, it pales in comparison to the staggering losses they’ve experienced. With the pandemic ongoing and no end to financial devastation in sight, our hospitals simply are not in the position to repay these loans. If forced to, services and jobs our hospitals provide in their communities will be at even greater risk than they already are.
HANYS thanks the entire bipartisan New York congressional delegation in the House of Representatives led by Reps. Eliot Engel (D-16) and Elise Stefanik (R-21) for their efforts to secure a legislative solution in the next COVID-19 response package, and for New York representatives’ push for passage of The COVID-19 Hospital Forgiveness Act (H.R. 7292), which would achieve this goal. We greatly appreciate the continued efforts by Senators Charles Schumer and Kirsten Gillibrand to include Medicare accelerated and advanced payment loan forgiveness in the Senate bill.
The public health crisis continues and the strength and preparedness of our healthcare providers remains essential. The clock is ticking. New York’s hospitals and the communities they serve need action now.