Congress alters the terms for Medicare loans

• President Trump today signed into law the HR 8337, Short Term Continuing Resolution, which funds the government through Dec. 11 among other provisions.
• Given the desire on both sides of the aisle not to shut down the government prior to the election Nov. 3, action to fund the government through Dec. 11 was expected.
• The legislation includes provisions that relax the terms of the Medicare Advanced and Accelerated Payment Program (AAP) loans for hospitals and other providers.

Today, President Trump signed into law the HR 8337, Short Term Continuing Resolution to fund the government through December 11. The president’s action was expected after the Senate passed the bill earlier this week. Both sides of the aisle are eager to avoid a government shutdown prior to the election Nov. 3 and in the middle of a public health emergency.

The legislation includes provisions that relax the terms of the Medicare Advanced and Accelerated Payment Program (AAP) loans. Based on the original terms of the loan, Medicare Administrative Contractors (MACs) should have withheld 100% of Medicare payments for providers who applied for and received AAP loans by the end of August at the latest. Had that occurred, hospitals would have had one year from the date they received the loan to repay it before CMS applied an interest rate of approximately 9.625% to the loan. Physicians would have had less time — 210 days from the receipt of the loan — before being issued a demand letter.

Now that the CR is signed into law, the AAP loan terms increased the repayment period to 29 months before a demand letter is submitted. During the 29-month period, there would be no claims offset for the first 12 months, a 25% payment offset for the next 11 months and 50% offset for the final six months. The legislation would also reduce the interest rate applied to any funds outstanding after the initial 29-month period to 4%.