• Home >
  • News >
  • Congress Relaxing Hospital Medicare Loan Requirements

Medicare Loan Recipients May Get Relief From Congress

Published September 30, 2020

Follow our Medicare Coronavirus News page for related information on coronavirus (COVID-19) and its impact on Medicare beneficiaries.

Relief may be on the way for hospitals that accepted Medicare loans during the COVID-19 crisis. 

The House of Representatives approved a short-term funding bill on Sept. 22 to help avoid a government shutdown on Oct. 1, when the government’s fiscal year ends. Included in the bill were some relaxed terms for accelerated repayments of Medicare loans that were handed out to hospitals in early 2020 to help fight the COVID-19 pandemic, caused by the novel coronavirus. 

The bill, which passed the House by a count of 359-57-1, now must be passed by the Senate. 

Many hospitals throughout the country continue to experience cash flow issues due to the pandemic. Loans were granted through Medicare’s Accelerated and Advance Payments program, which is used in times of emergencies like natural disasters. The program was expanded for use as part of the CARES Act in March that provided financial aid in the midst of the pandemic.

Around $100 billion in advance payments must be repaid to Medicare. 

What’s in the bill

The items in the House bill that addressed Medicare loan repayment terms include:

  • Extending the deadline for when CMS would begin withholding payments in order to recoup the funds. The original agreement of 120 days was pushed out to one year from the date the loan was issued. This allows providers until the spring of 2021 to pay back the loan before having any additional payments withheld.

  • Increasing the timeline for hospitals to repay the loan in full before interest begins to accrue. Borrowers would have 11 months to repay 25% of the loan and an additional six months to repay 50% of the balance before interest accrues.

  • Lowering the interest rate of the loans from around 10% to 4%.

  • Increasing the amount of time that hospitals have to repay the loan. The original arrangement called for 12 months. The new bill extends that to 29 months from the date of issue.

The bill is expected to pass in the Senate. 

Learn more about Medicare news and how the COVID-19 pandemic affects beneficiaries.