Geisinger, Evan benefit from COVID-19 loan repayment relief

October 29, 2020
In The News

Data from the Centers for Medicare & Medicaid Services (CMS) shows Geisinger received $312,575,961 while Evangelical Community Hospital received $17,612,405 in loans through the Accelerated and Advance Payment (AAP) Program.

This Medicare loan program allows health care providers to receive advance payments typically used in emergencies. The program was expanded in March to help hospitals and clinics with cash flow amid the spread of COVID-19. According to CMS, the agency issued $106 billion in payments to providers and suppliers.

Passed by Congress and the Senate in late September and subsequently signed into law by President Donald Trump, the Continuing Appropriations Act stalls the start of repayment to one year after the loans were issued and 29 months to repay the debt until it becomes due in full with lowered interest and repayment rates.

Those funds initially were to be repaid about 4 months after being issued and in August as Evangelical’s debt came due, hospital administrators there raised concerns about repayment with Congressman Fred Keller.

James Stopper, vice president of finance, Evangelical, said the advanced payments maintained cash on hand and ensured money would be available in the face of temporary losses caused by declining patient volume. Hospital revenue dropped when services were greatly scaled back into early May as a result of COVID-19 mitigation measures.

“The funds can be used to cover payroll and other expenditures in the event the pandemic causes the worst-case scenario where expenses far exceed income from daily operations,” Stopper said.

“Repayments will begin in April 2021 but are not due to be repaid in full until September 2023,” he said.

Geisinger used its funds at eight hospitals and more than 250 clinics in Pennsylvania as the hospital system prepped for COVID-19.

“We are grateful for these payments and CARES Act grant funding, but the negative impact of COVID-19 far exceeds these payments. With COVID-19 still present in our communities, the delay in repayment allows for the continued availability of these funds so we can remain ready to care for our communities in the event of the virus’ resurgence,” according to a prepared statement released by Geisinger.

Geisinger's statement expressed optimism that Congress would pursue further relief by converting the advances into forgivable loans "that would defer payment or would not need to be repaid should COVID continue to strain healthcare organizations this fall and winter." 

"Doing so will not fully reimburse caregivers but can help minimize the negative financial impact COVID-19 has caused health systems, including Geisinger," the statement read.

Keller said helping rural hospitals operate through the pandemic is a top priority.

“I supported the accelerated payment option originally provided in the CARES Act, and Congress is continuing to examine how to further improve the options available and give rural hospitals the help they need. We are working to help our hospitals manage the repayment of this funding in a way that doesn’t adversely affect the people they serve,” Keller said.