As COVID-19 cases hit record numbers in Kentucky, policymakers must work together to protect access to care and ensure our hospitals and other providers have the resources needed to fight this pandemic. However, this may be impossible if Congress doesn’t immediately update the Medicare Accelerated and Advance Payment Programs (MAAPP), which has been around for years and was updated and expanded by Congress through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Failure to act quickly and decisively could put access to quality medical care at significant risk.
By expanding MAAPP, Congress was able to provide economic support for hospitals facing increasing cost burdens due to the COVID-19 crisis. By allowing hospitals to apply for three or six-month advances on their typical Medicare fee-for-service payments, hospitals would be able to cover the costs of preparing for a surge of new COVID-19 patients, build additional and alternative ICUs, and protect caregivers. While expanding MAAPP to more hospitals and health care providers was a wise decision, outdated terms of the program threaten to hinder those hospitals and health care providers’ ability to provide quality care for patients at a crucial time in the fight against COVID-19.
Kyle Keeney
MAAPP loans helped protect at-risk hospitals and vulnerable patient communities, but that would quickly change if a number of the loan repayment terms aren’t immediately adjusted. Currently, hospitals must begin MAAPP loan repayment within 120 days of receiving the loan. For many hospitals, repayment would need to begin on or around Aug. 1. For most providers, this is simply too soon as hospitals aren’t yet out of the woods when it comes to COVID-19. Congress must give these hospitals and providers at least one year before requiring repayment to begin.
Additionally, once repayment begins, hospitals will stop receiving any Medicare fee-for-service payments until the loan is paid in full. That would essentially slash a quarter of a hospital’s total payments on average. For rural Kentucky hospitals, this would deal an even more devastating blow as they are more likely to serve at-risk patients — senior citizens, the economically disadvantaged, and those already struggling with medical conditions — than patients in urban or suburban areas.
Now is not the time to be denying Medicare payments for hospitals and providers. That will only undermine their ability to continue providing quality, comprehensive care for patients and entire communities. Senators McConnell and Paul should push Congress to reduce the amount of repayment taken from Medicare claims from 100 to 25 percent per claim.
Another requirement that must be revised is the repayment period and interest rate applied if hospitals do not fully repay their loans in the time allotted. Currently, hospitals have 12 months — while clinicians and other providers have seven months — to repay MAAPP loans. After that, these loans will begin to accrue interest at roughly 10 percent. Not only are repayment periods too short, but the interest is far too high, exceeding what Congress required for other industries under the CARES Act.
We are still fighting the COVID-19 pandemic. The hospitals and providers that have been on the frontline in treating patients should have more time to repay their loans and should not be subject to outrageously high interest rates. More realistic terms would give hospitals at least 36 months to repay their loans and waive interest altogether—or at the very least limit it to no more than 1 percent.
Finally, Congress should also resume distributing MAAPP loans, which were paused in late April. As COVID-19 is expanding in certain populations, those hospitals that did not take advantage of the program back in the onset of the pandemic should be allowed to do so now. And, the accelerated and advance payments should be increased to cover up to 12 months instead of three to six. This will give all hospitals the resources they need to prepare for a projected second surge of the virus.
MAAPP loans are vital to bolster hospitals’ ability to ensure patient access to care. But without updating loan repayment terms, Congress is dooming America’s hospitals to more financial hardships down the road. Senators McConnell and Paul should put Kentucky patients and providers first by updating these terms before the looming Aug. 1 deadline.
Kyle Keeney is the founder and director of the Kentucky Access to Care Coalition.
