April 19, 2021

Gillibrand Asks Biden Administration To “Explore All Options,” Help Hospitals Recover From Covid-Related Financial Stress

Gillibrand Letter Outlines Options Including Loan Forgiveness and Interest Payment Relief for Hospitals

U.S. Senator Kirsten Gillibrand sent a letter to Acting Administrator of Centers for Medicare & Medicaid Services (CMS) Liz Richter, requesting that the Biden administration explore all options to alleviate the financial burdens incurred through the emergency measures of the Medicare Accelerated/Advanced Payments Program. The letter requests that the administration evaluate options for total loan forgiveness, adjustments to repayment interest rates to reduce interest burdens, and extensions to repayment schedules to afford our hospitals more time as they continue to grapple with the COVID-19 pandemic.

Hospitals across New York state were stretched to the breaking point at the peak of the COVID-19 pandemic nearly a year ago. According to the Healthcare Association of New York State (HANYS) lost revenue and extra costs could add up to $20 billion and $25 billion, since April 2020. 

“Though it appears we may be turning a corner nationally in our pandemic response, the financial burdens on New York’s hospitals have not ceased, nor will they in the near future. That’s why I am urging the Biden administration to explore all options to help our hospitals manage the massive financial losses incurred throughout the past few months,” said Senator Gillibrand.“Accelerated and advancement payments through Medicare, as authorized under the CARES Act, have been a lifeline for New York’s hospitals during the ongoing pandemic. The federal government has a responsibility to make sure our hospitals can continue delivering the quality care we rely on through the worst and best of times.”

“The Medicare Accelerated and Advance Payment Program was a lifeline to New York hospitals during the height of the COVID-19 pandemic, but the repayment terms are onerous,” said Greater New York Hospital Association President Kenneth E. Raske. “Fortunately, Senator Gillibrand recognizes that the hospitals continue to struggle financially as they navigate numerous COVID-19-related challenges. GNYHA is extremely grateful to Senator Gillibrand for her efforts to provide relief to hospitals in New York and across the country by easing the Medicare Accelerated and Advance Payment Program’s repayment terms.”

“The Medicare Accelerated and Advance Payment Program was a desperately-needed lifeline for New York’s hospitals at the height of the COVID-19 pandemic,” said HANYS President Bea Grause, RN, JD. “Our hospitals are still on the front lines of the pandemic and are grappling with staggering financial losses. Instead of forcing struggling hospitals to repay these loans, HANYS strongly supports loan forgiveness. We thank Senator Gillibrand for her commitment to drawing attention to this critically important issue and for seeking all avenues to provide relief to hospitals in communities across the state.”

Gillibrand previously wrote to Senate leadership calling for Medicare accelerated/advanced payment program loan forgiveness for hospitals across New York. At the time, hospitals in New York reported an average revenue loss of over 40% in March alone, and were losing at least $750 million per week at the beginning of the pandemic. While the CARES Act authorized the Medicare accelerated/advanced payments, a lifeline for many hospitals, the steep interest that accompanied the loans coupled with ongoing financial devastation, has left many hospitals unable to repay. Without additional federal support, New York hospitals will be forced to make disastrous cuts like reducing critical health care services and laying off essential health care workers.

Read the text of the letter here and below.

Dear Administrator Richter,

As our nation begins to turn a corner in our pandemic response, I urge you to explore all options for alleviating financial burdens on hospitals related to the Medicare Advanced and Accelerated Payments Program. The Centers for Medicare & Medicaid Services must pursue all avenues to continue to promote the financial health of our nation’s hospitals, up to and including total debt forgiveness and interest payment relief.

Medicare accelerated/advanced payments, authorized under the CARES Act (P.L. 116-136), have been a lifeline for New York’s hospitals during some of the most difficult days of the ongoing pandemic. Every New York hospital has made significant financial investments to prepare for and respond to the surges of coronavirus patients. Since the start of the pandemic, our hospitals have rapidly added beds in intensive care units, built new isolation units to treat COVID-19 patients, and bought personal protective equipment at record prices. In addition, many New York hospitals are providing other services such as housing and childcare to support the brave physicians, nurses, frontline health care workers, and the many support and custodial staff who are making tremendous sacrifices every day to care for their fellow New Yorkers.

Through these difficult times, the Medicare Advanced and Accelerated Payments Program has been an important source of funding for hospitals, which have been the front line of the pandemic response. The need for these funds intensified throughout 2020, as our hospitals grappled with surge after surge of COVID cases. The financial stress of this response has forced many of our hospitals to take funding advances and loans, delay accounts payables, furlough thousands of staff, and postpone much-needed capital projects. These hospitals did not take these fiscal measures lightly. Rather, their unique position in the COVID response pushed them into this position.

Though it appears we may be turning a corner nationally in our pandemic response, the financial burdens on New York’s hospitals have not ceased, nor will they in the near future. Barring future surges in COVID cases, it will still be years until many of my state’s hospitals and hospitals throughout the United States have recovered financially from the pandemic’s effects. As such, the federal government bears an important responsibility to alleviate burdens on our nation’s hospitals.

Accordingly, I ask that you explore all possible options for alleviating the financial burdens incurred through the emergency measures of the Medicare Accelerated/Advanced Payments Program. In particular, I urge you to evaluate options for (1) total loan forgiveness, (2) adjustments to repayment interest rates to reduce interest burdens, and (3) extensions to repayment schedules to afford our hospitals more time as they continue to grapple with the COVID-19 pandemic.

Sincerely