COVID-19 is a nationwide crisis that is hitting us hard at home. AllianceHealth Ponca City has cared for over 20 COVID-19 positive patients in our hospital and we continue to see the number of cases rise in our community.
The fight to defeat COVID-19 is far from over, and AllianceHealth Ponca City and our employees remain the front line defense against the continued spread of this virus.
Yet in the middle of the fight outdated federal program requirements could threaten patients’ access to care.
The program in question is the Medicare Accelerated and Advance Payment Programs. Just like the title suggests, it provided hospitals like ours loans in the form of an advance on our expected Medicare fee-for-service payments. This loan helped us keep our doors open as COVID spread chaos across the health care industry halting non-emergency surgeries, cancelling countless patient treatments, all while we are prepping for and dealing with a surge of COVID patients.
AllianceHealth Ponca City is grateful for these loans and the help they extended to us and, in turn, the patients we serve. However, the programs’ unrealistic loan repayment terms are turning this lifeline into an anchor that could sink our recovery — and that of other hospitals and clinicians across the country.
The problems start with the incredibly short repayment timeline. Hospitals received the loans in March and April of this year, but are expected to begin repaying them on or about August 1st. Thus, in a matter of days, hospitals around the country, including ours, who accepted these much-needed loans will lose Medicare fee-for-service payments. These payments will be zeroed out until the borrowed funds are repaid meaning for every Medicare patient our hospital treats after Aug. 1, we will receive $0 in Medicare payment for those services. The complete loss of this funding will increase the strain on hospitals — especially while we are still dealing with the first wave of this deadly virus and preparing for an anticipated second surge of COVID cases in the weeks and months to come.
Medicare fee-for-service patients make up approximately 42% of our total patients and losing 100% of payments for those services is a catastrophic blow. And we aren’t alone. Nationwide, hospitals repaying the loans will lose an average of approximately 25 percent of their payments — a massive hit that will put patient care in jeopardy.
In addition, if the loan is not fully repaid within one year, an approximate 10% interest rate — significantly higher than any other loan interest rates across the country right now — starts accumulating on the remaining balance.
These onerous terms threaten to put some health care providers out of business at a time when our communities need us the most.
The good news — there are some simple adjustments Congress can make to this program to head off disaster and instead support and strengthen front line care.
We urge all U.S. Senators, including Senator Lankford, to stand with hospitals and make the necessary changes to the Medicare Accelerated and Advance Payment Programs - including adjusting the repayment timeline and lowering the interest rate. This will allow hospitals and our workers to focus on what we do best - provide lifesaving care to everyone in our