Trump Signs Medicare Loan Relief Bill Delaying Repayments


President Trump on Thursday morning signed a bill to keep the federal government running through December 11. This “continuing resolution” (CR), which was approved by the Senate Wednesday on an 84-10 vote, according to The New York Times, includes provisions to delay repayment by physicians of pandemic-related Medicare loans and to reduce the loans’ interest rate.

In an earlier news release, the American Medical Association (AMA) reported that Congress and the White House had agreed to include the provisions on Medicare loans in the CR.

Under the Medicare Accelerated and Advance Payments (AAP) program, the Centers for Medicare & Medicaid Services (CMS) advanced money to physicians who were financially impacted by the pandemic. The program, created in March, was suspended in late April.

Physicians who received the Medicare loans were supposed to start paying them back 120 days after they were made. CMS planned to recoup the advances by offsetting them against Medicare claims payments due to physicians. Practices had up to 210 days (7 months) to repay the loans through this process before being asked to repay them directly with interest of 10.25%.

For the practices that received these advances, that meant their Medicare cash flow was scheduled to dry up, starting in August. However, CMS quietly abstained from collecting these payments when they came due, according to Modern Healthcare.

New Terms

Under the new loan repayment terms in the CR, recoupment of the disbursed funds is postponed until 365 days after the date on which a practice received the money. The balance is due by September 2022.

The amount to be recouped from each claim is reduced from 100% to 25% of the claim for the first 11 months and to 50% of claims withheld for an additional 6 months. If the loan is not repaid in full by then, the provider must pay the balance with interest of 4%.

More than 80% of the $100 billion that CMS loaned to healthcare providers through May 2 went to hospitals, Modern Healthcare calculated. Of the remainder, specialty or multispecialty practices received $3.5 billion, internal medicine specialists got $24 million, family physicians were loaned $15 million, and federally qualified health centers received $20 million.

In the AMA’s news release, AMA President Susan Bailey, MD, who assumed the post in June, called the original loan repayment plan an “economic sword hanging over physician practices.”

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