Senator Co-Authored the Proposal with Shaheen in the Senate
Washington, D.C. – Colorado U.S. Senator Michael Bennet issued the following statement after the House passed legislation to fund the government until December 11th. The funding bill includes a key provision responding to Bennet’s call to amend the recoupment period on loans to health care providers under the Medicare Accelerated and Advance Payments (AAP) program and lower the interest rates on the loans.
“The financial strain on our health care system caused by the COVID-19 pandemic is dire and complex for Colorado’s health care providers on the front lines caring for people in our communities,” said Bennet. “I have fought tirelessly to ensure that our hospitals and physicians––especially those in rural Colorado––have the certainty and stability to continue to provide care. I welcome these reforms to the Medicare Accelerated and Advance Payments Program, which will be critical to provide financial relief to providers as they continue to serve our communities during this once-in-a-century pandemic.”
The proposal will delay the recoupment period for one year after the loan was made, and for the first 11 months of the recoupment, Medicare will only withhold 25 percent – instead of 100 percent – of the payments that would otherwise be made to the provider to reimburse them for Medicare services. After six months, Medicare will only be allowed to withhold 50 percent of the otherwise payable amount. Additionally, the start of the accrual of interest on the loans will be delayed until 29 months after the loan was made, instead of one year. The legislation also reduces the interest rates on loans to 4 percent, which previously were as high as 10.25 percent. All of these reforms were included in Bennet and Senator Jeanne Shaheen’s (D-N.H.) Medicare Accelerated and Advance Payments Improvement Act that was introduced in May.
The AAP program was expanded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to allow for hospitals, physicians and other Medicare-participating providers to apply for upfront payments from Medicare to help cover revenue shortfalls as a result of COVID-19. To date, over 500 Colorado providers have received more than $1.3 billion in upfront payments through this program to mitigate the economic shortfall caused by the pandemic. Across the nation, this program has delivered more than $100 billion in upfront payments to health care providers.