CMS accelerated payments to hospitals and other health care workers at the start of the COVID-19 pandemic to temporarily relieve financial strain. It’s time to start repaying Medicare loans, but that’s not possible for some rural hospitals, according to NPR.
CMS expanded its accelerated and advance payment program in late March to help offset the financial damage caused by the COVID-19 pandemic. CMS announced on April 26 that it was re-evaluating pending and new applications for prepayments due to the availability of funds under the Coronavirus Aid, Relief and Economic Security Act. By May, CMS had paid $ 100 billion in advances, the most of which went to hospitals.
Hospitals and other health care professionals must begin repaying Medicare loans this month. Most hospitals will have one year from the date the first loan payment was made to repay the loans, according to the Kaiser Family Foundation.
Ozarks Community Hospital, a 25-bed critical access hospital in Gravette, Arkansas, is one of the hospitals that have applied for and accepted Medicare loans. The hospital has also received scholarships made available by the CARES law, which do not need to be reimbursed.
CEO Paul Taylor said Ozarks Community Hospital’s income is still limited and he doesn’t know how it will repay its $ 8 million Medicare loan. Payments for new Medicare claims will be compensated to repay the loans, but the loss of those payments could force the hospital to close, Taylor said. NPR.
“If I don’t get any relief and they take the money … we won’t be open yet,” he said.
Ozarks Community Hospital is one of more than 850 critical access hospitals in rural areas that have received Medicare loans, according to NPR. Given the shaky financial bases of many rural hospitals before the pandemic, the strain of Medicare payments withheld may be enough to force others to close.
Prior to the pandemic, more than 600 rural hospitals in the United States were vulnerable to closure, according to an estimate from iVantage Health Analytics, a company that compiles a hospital strength index based on financial stability data, patients and quality indicators. If financial pressures related to the pandemic force one of those hospitals to close, they will join the list of 131 rural hospitals that have been closed in the past decade, according to the Cecil G. Sheps Center for Health Services Research.
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Medicare Payment Rules for 2021: 11 Notes for Hospital Managers
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