Federal Funding Bill Includes Important Hospital Provisions

October 5, 2020

Congressional leaders averted a government shutdown by passing a short-term Federal funding bill that includes limited Medicare advance payment relief and a Medicaid Disproportionate Share Hospital (DSH) cut delay. The short-term continuing resolution (CR) continues Federal funding until December 11, 2020.

The CR includes reforms to the Medicare Accelerated and Advance Payments Program (MAAP). The CARES Act’s expansion of the MAAP enabled hospitals and other providers to request a six-month Medicare advance, but the advances are subject to repayment after 120 days by offsetting amounts owed against current Medicare payments (meaning that providers would receive no Medicare payments until the advance was repaid). Fortunately, the Centers for Medicare & Medicaid Services (CMS) has delayed this recoupment pending the outcome of Congressional discussions.

The CR makes the following improvements to the repayment terms:

  • Pushes the loan recoupment to one year after issuance of the advance payment
  • Extends the balance due date to September 1, 2022
  • Reduces the recoupment percentage against Medicare claims to 25% for the first 11 months and then to 50% for the six months thereafter
  • Reduces the interest rate on any amounts due after September 1, 2022, to 4% (down from the current rate of roughly 10%)
  • Removes the Health and Human Services Secretary’s discretion to approve hospital advances (CMS halted some hospital applications for advances). This provision would reopen the MAAP for those hospitals and hospitals that have not yet applied.

While the proposal does not address all our MAAP concerns, GNYHA welcomes these changes. Reforming the MAAP has been one of our top legislative priorities over the past several months. We will continue to advocate for additional improvements, such as allowing for forgiveness of the advance. The CR also includes a short delay of the Medicaid DSH cuts that are scheduled to start on December 1. The cuts will be delayed for the same length of time as the CR—through December 11. GNYHA will continue to advocate for the elimination of all Medicaid DSH cuts when Congress addresses this issue again next year.

The CR’s other key provisions include extending funding for community health centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education program through December 11.

GNYHA strongly advocated for these provisions and is grateful to the New York Congressional delegation for its support of our member hospitals and their workers. GNYHA is particularly grateful to Senate Minority Leader Chuck Schumer (D-NY) for his unwavering support and advocacy on behalf of the hospital community.

While the Federal funding bill addressed some of our policy priorities, our work is far from over. GNYHA is pressing Congress to continue negotiations and pass a significant COVID-19 relief package as soon as possible. We remain in close contact with members of Congress and their staff as we aggressively advocate for our legislative priorities (e.g., increased funding for state and local governments, increased resources for the Public Health and Social Services Emergency Fund, liability provisions, and crisis pay for health care workers).

We will keep you apprised of all Federal developments.