U.S. hospitals need Congress to forgive $100 billion in Medicare loans that had been made earlier this yr to assist the healthcare system amid the coronavirus disaster, CNBC experiences.
The issue comes from the truth that the administration will start withholding new Medicare funds Aug. 1 until the loans made earlier this yr are repaid. If not paid in a yr, the loans will lead to a 10 % curiosity cost on high of how a lot the loan is for, the information outlet stated.
In line with the Federation of American Hospitals (FAH), which may not be possible. FAH Chief Govt Officer Charles Kahn stated the debt “could be crippling for hospitals in the midst of new Covid surges,” CNBC reported. The FAH has a countdown clock of the compensation deadline looming.
And American Hospital Affiliation (AHA) Chief Govt Rick Pollack stated the loans deserved to be forgiven as a result of they’re a “mechanically easy way to provide instant relief to people on the ground.” The AHA stated the pandemic had resulted in a brand new quantity of economic strain, and one not offset by earlier federal monetary support measures just like the CARES Act.
With out extra aid, the group stated half of all U.S. hospitals had been liable to working within the purple, CNBC reported, with a median lack of 7 %, in response to a Kaufman, Corridor & Associates survey.
Because the coronavirus has continued to surge, hospitals have discovered themselves in a tough place, with elevated revenues from an inflow of COVID-19 sufferers, however much less income from elective procedures.
Below the Home’s current proposal to restructure Medicare loans, the hospitals would have extra time to repay the loans at an rate of interest of 1 %. The Senate is reportedly additionally contemplating related measures.
And Raymond James analysts say there’s additionally obvious bipartisan assist for giving hospitals and different such firms extra funds, with Republicans pushing for later dates to pay again the loans. Nonetheless, outright forgiveness of loans is unlikely — Republicans have begun to start out getting extra fiscal about their funding measures, in response to Ipsita Smolinski, managing director at consulting agency Capitol Street, CNBC stated.