Sanford ends merger talks with Intermountain after CEO’s abrupt departure

The merger talks are off between Sanford Health and Intermountain Healthcare, just a month after an agreement was announced and just over a week after Sanford’s CEO abruptly stepped down. 

Former Sanford CEO Kelby Krabbenhoft left Nov. 24 in what the board called a mutual decision after making the controversial claim that he didn’t need to wear a mask because he can’t transmit COVID-19 after contracting the coronavirus. Sioux Falls, S.D.-based Sanford cited the leadership change in its decision to pause current merger and acquisition activity while they address other needs. 

Sanford has 46 hospitals and operates in North Dakota, South Dakota, Northwest Iowa and Western Minnesota. The system drew almost $7 billion in total revenue in 2019. Intermountain, which drew $7.6 billion in revenue last year, has 24 hospitals and operates in Utah, Idaho and Nevada.

Nurses hold virtual press conference to brief nation on most current challenges they face during recent Covid surge.

National Nurses United will hold a virtual press conference Monday, Nov. 23 to brief the nation on the challenges nurses face now as Covid-19 infection rates, hospitalizations, and deaths surge to record-breaking highs in almost every state.   

“With the infection numbers we are seeing now, we are on trajectory to see an unprecedented — and even cataclysmic — level of death and suffering if we don’t immediately correct course,” said Bonnie Castillo, RN and executive director of NNU. “Nurses are calling on our elected officials, government agencies, our hospital employers, and the public to implement the science-based infection control measures that we have been demanding since the beginning of this pandemic.”

Nurses from a number of overwhelmed, hotspot areas across the country — including Minnesota, Illinois, Florida, Michigan, and Texas — will share their current experiences and challenges caring for Covid patients, including accessing optimal personal protective equipment (PPE), getting tested, having the resources and staffing levels they need to provide safe care, getting notified when they have been exposed, being allowed to quarantine at home without loss of income when sick or exposed, and pressuring their hospital employers to practice proper infection control.  

Nurses have been warning since January that the exact situation the country is now going through would happen if we did not follow the precautionary principle to err on the side of safety in responseto this virus. Nearly a year later, hospitals and government agencies responsible for public and worker health and safety have still not gotten their act together. NNU’s latest, ongoing survey of more than 15,000 registered nurses shows that the vast majority of their hospital employers have knowingly failed to prepare for the winter cold and flu season: 82 percent of hospitals have done no surge capacity or planning. 

he profit motive has, devastatingly, driven national decision making on Covid response, say nurses. Just this week, NNU released a report showing that U.S. hospitals, on average, charge $407 for every $100 of their costs, and the worst offenders can mark their prices up to 18 times their costs. State economies also opened prematurely. Federal, state, and local governments failed to lead and allowed political and business influences instead of science to guide their Covid policies.

Consequently, more than 11.6 million people in the United States have been infected, resulting in upwards of a quarter million deaths — among which were more than 2,150 health care worker deaths that included at least 253 registered nurses.

In addition to immediately implementing science-based infection control measures and policies, NNU nurses urge Congress to pass a Covid-relief bill now that would provide the economic, health care, and social assistance people and small businesses in the United States need to stay at home until our infection rates are brought down to manageable levels.

Cleveland Clinic names physician to lead virtual health

Cleveland Clinic on Thursday announced Dr. Steven Shook, a neurologist, will serve as the health system’s virtual health lead.

Shook will report to Dr. James Merlino, Cleveland Clinic’s chief clinical transformation officer, in the new role, where he will develop and monitor the health system’s virtual health strategy. Shook will also work closely with Josette Beran, Cleveland Clinic’s chief strategy officer, according to the health system.

Merlino appointed Shook to the virtual health role after an internal search.

Shook, who joined Cleveland Clinic as a staff neurologist in 2007, teaches at the Cleveland Clinic Lerner College of Medicine and previously served as quality improvement officer and vice chair of operations in the health system’s neurological institute.

Cleveland Clinic joins a growing number of health systems carving out telehealth leadership roles as virtual care has skyrocketed amid the COVID-19 pandemic.

Telehealth proved a powerful interim avenue for physicians to continue seeing patients even when hospitals closed their doors for non-emergency care. Roughly 93% of respondents to Modern Healthcare’s Power Panel survey of top healthcare CEOs in the spring cited telehealth as a technology with the most potential to support pandemic response.

In the last week of April, nearly 1.7 million beneficiaries received telehealth services, up from roughly 13,000 beneficiaries that received telehealth services per week before the public health emergency, according to CMS Administrator Seema Verma.

While telehealth use has declined since hospitals began reopening, it’s so far plateaued at a notably higher rate than before the pandemic. It’s unclear to what extent the gains in telehealth that hospitals experienced in the spring will be sustained, as providers wait to see which telehealth flexibilities pushed through by the federal government during the pandemic are made permanent.

Hospital M&A volume sinks to 10-year low

Hospital merger and acquisition activity reached a 10-year low as deal volume continued to slump in the third quarter, according to a new report. 

The 12 announced acute-care hospital transactions in the third quarter marked the fifth consecutive quarterly decline in volume, amounting to the lowest trailing four-quarter tally since 2010, according to Ponder & Co. While health systems are still actively exploring potential deals, it wasn’t surprising that the COVID-19 pandemic slowed or derailed some transactions, said Eb LeMaster, a managing director at the healthcare advisory firm. 

“Activity will tick up, but I am not sure that there will be a massive wave of deals on the other end of this that some are predicting,” he said. “Sellers are trying to figure out where they stand; buyers are being more selective.”

In addition to the financial upheaval, video conferencing is another limitation, LeMaster said. Zoom only goes so far when relatively unfamiliar parties come to the table, he said. 

Many of the organizations formalizing deals were large not-for-profit health systems. Aside from the Catholic health system acquirers with more than $10 billion in revenue, the others that announced acquisitions in the third quarter were academic medical centers or organizations with significant academic affiliations, according to the report. Most of the recent transactions were between in-state or market adjacent parties.

While there have been some divestitures, the for-profit sector has been uncharacteristically silent, LeMaster said. There have been no announced acquisitions during the first nine months of 2020 by the publicly traded hospital companies, many of which are still digesting large mergers or are conserving capital, he said. 

“None by that group year to date is saying something,” LeMaster said. 

Hospital M&A experts suspect activity to pick up in the second half of next year, although to varying degrees. Pent-up demand, increased cash flow fromCOVID-19 relief funding, expense management and patient volumes will all come into play. 

Government funding has boosted liquidity for large systems, which has created an environment rich for consolidation, Ken Marlow, a partner and healthcare industry chair at Waller Lansden Dortch & Davis, told Modern Healthcare last week after M&A talks between Advocate Aurora Health and Beaumont Health fell apart.

Former Beaumont director wants CEO, top execs fired, merger delayed.

Mark Shaevsky, who served on the Beaumont board for 17 years until 2014, told Crain’s he has been frustrated the past several months that a majority of the Beaumont board appears to support the proposed merger with 28-hospital Advocate Aurora Health, a nonprofit health system with offices in Chicago and Milwaukee.

He also said he doesn’t believe the board has sufficiently addressed patient safety concerns expressed by doctors and nurses.

“I am very, very concerned the proposed acquisition, and I call it an acquisition, is very, very detrimental to the community,” Shaevsky said Thursday. “We have a significant community asset and if the merger is completed it will not really be controlled by the community.”

Shaevsky said Southfield-based Beaumont Health could continue to exist and thrive without being part of a larger system. “I don’t think bigger is better. I don’t see where the benefit would be to Beaumont,” he said.

In his Sept. 4 letter to Nessel — received by her office on Sept. 8 — Shaevsky detailed why he believes the proposed merger makes no sense.

“Beaumont’s annual revenues are nearly $5 billion,” wrote Shaevsky, an attorney who now heads Mark Shaevsky & Associates, LLC – Management Advisors in Farmington Hills. “If sold, the proceeds of $5 billion would go into a community foundation to support the health needs of the community. If the $5 billion would produce annual income of 5 percent, that would mean $250 million would be available for the betterment of our citizens every year indefinitely — and still have the $5 billion foundation. So, why would the citizens of Michigan transfer 100% ownership of a $5 billion community asset to another institution in return for promises of expenditures of slightly over $1 billion and a minority interest in a combined hospital system?”

Shaevsky told Crain’s he is not in favor of Beaumont selling to a for-profit company like Tenet Healthcare or HCA Healthcare, where the sale proceeds would go to create a community foundation. He said he used the example to illustrate how a nonprofit like Advocate Aurora would assume the assets and leave very limited reserved powers for local control.

“You have a valuable asset built up over the years. It is tax-exempt and belongs to the community,” Shaevsky said.

Fox has said that Advocate Aurora will make a $1.1 billion investment in Beaumont for capital, equipment and clinical program improvements over the next three years, if the merger is approved.

Shaevsky wrote the capital promise comes “without guarantees” and could be disregarded or delayed.

Advocate Aurora CEO Jim Skogsbergh has told Crain’s the system is committed to the funding, but that it could take more than three years to complete because of the COVID-19 pandemic and projected system losses of $500 million this year.

“The reality is Beaumont has the financial resources to pay for all the projects allegedly promised by Advocate,” Shaevsky wrote, adding that Beaumont has more than $2 billion in cash reserves and a top credit rating for tax-exempt bonds.

Contacted by Crain’s, Nessel’s office said she has received numerous letters about the Beaumont-Advocate proposed merger and that a preliminary review is underway. Nessel must approve the merger, a process that could take months.

Mark Geary, a Beaumont spokesman, said the system has not seen Shaevsky’s letter and could not comment at this time.

Shaevsky said Nessel’s office acknowledged his letter. He said he has no confidence in the board taking action and felt Nessel might intervene on behalf of the community.

Sutter Health’s bottom line, sinking its operating margin to almost -11%.

The not-for-profit lost $321 million on $2.9 billion in revenue in the quarter ended June 30. The Sacramento, Calif.-based system’s margin was already slim—just $36 million on $3.3 billion in revenue in the prior-year period, a 1% margin. 

The health system’s finances deteriorated under California’s mandatory suspension of elective procedures that began in March. Sutter’s admissions and patient days both fell almost 10% in the quarter. Emergency room visits fell almost 20%. Sutter’s outpatient revenue was down 14%. 

Sutter spokeswoman Amy Thoma Tan said in an email that it could take the health system years to recover from this “unprecedented crisis.” “While we have seen some patient volumes rebound, responding to COVID-19 continues to require extensive resource investments,” she said. 

All told, Sutter’s patient service revenue plummeted by 24% in the quarter year-over-year as the pandemic forced the system to suspend elective procedures. Premium revenue fell 5%. 

Sutter’s expenses were mostly flat in the quarter at just under $3.3 billion. Within that, salary and benefit costs jumped 6%, Some expenses declined, including supplies, which fell 16%, as fewer items were necessary for surgeries during the suspension. Purchased services fell 5% year-over-year.

Positive investment performance brought Sutter’s net income to $220 million in the quarter ended June 30, compared with $113 million in the prior-year period. 

It’s unclear how long the pandemic will continue to disrupt Sutter’s operations, Thoma Tan said. 

“What we do know is that the affordability challenges that existed before this pandemic—changes to our payor mix and increasing labor, technology and facilities costs—have been further heightened by recent events,” she said. 

The judge overseeing the antitrust lawsuit against Sutter hasn’t yet approved a preliminary settlement, which includes a $575 million payment and ceasing all-or-nothing contracting practices, anticompetitive bundling of services, and other mandates. The settlement will resolve allegations from a high-profile, class-action lawsuit in which plaintiffs accused Sutter of a range of anticompetitive practices that allegedly drove up the cost of healthcare in Northern California.

Mount Sinai, Yale, Johns Hopkins to track chronic kidney disease in COVID survivors

After obtaining promising initial results in a smaller trial launched earlier this year, a biotech startup has begun a new multi-center trial with Mount Sinai, and medical schools at Yale, the University of Michigan Medical School, Johns Hopkins, and Rutgers to predict long-term kidney disease risk in recovering COVID-19 patients.

RenalytixAI, a London-based diagnostics firm runs a blood-based assay for predicting the risk of progressive decline in patients’ kidney function. The firm’s researchers run a sample on a multiplex electrochemiluminescence assay to identify three biomarkers, then combine data derived from a patient’s electronic medical record to generate a risk score of the patient’s progressive kidney decline. 

As part of the new trial, the team will monitor recovered patients who developed acute kidney injury while in the hospital or may potentially suffer from chronic kidney disease in the future.

In the smaller study, the researchers collected both blood and urine samples from patients hospitalized with COVID-19. The team analyzed the incidence and severity of acute kidney injury, certain risk factors associated with the condition, the proportion of patients needing dialysis, patient mortality, and how often surviving patients recovered kidney function.

Coca’s team initially published a preprint regarding the results and expects to publish a finalized version of the study examining a total of 3,993 COVID-19patients in the Journals of American Society of Nephrology later this year.

“While 46% (1,835) of the population acquired AKI, 17% of those [patients] required dialysis, and the mortality [of the AKI population] was about 50%,” Steven Coca, RenalytixAI cofounder and associate nephrology professor at the Icahn School of Medicine at Mount Sinai, explained. “We found that about a third of patients with AKI that survived did not recover kidney function by the time of discharge.”

Despite patients in the trial having a median hospital stay length of about 10 days, Coca and his colleagues realized they needed to track patients’ recovery time and observe long-term kidney function post-discharge to better gauge their risk of CKD. 

Coca explained that in the new trial, his team will collect blood and urine samples of COVID-19 survivors with AKI before they are released from the hospital.

“Severity and duration of AKI in the setting of COVID appears to more severe than ‘standard AKI,'” Coca noted in an email. “Thus, we believe the risk for CKD after surviving COVID-AKI will be higher than routine AKI, and risk stratification will be needed to determine who will need to be seen by nephrologists and who needs more aggressive post-AKI care.”

RenalytixAI’s academic collaborators will collect blood and urine samples from their health systems and send them to Mount Sinai, where Coca’s team will analyze the samples. The group aims to process samples from as many as 4,000 patients over the course of the multi-year longitudinal study.

“Now that patients have recovered from COVID-19, you can see them in person and measure markers including their IGG antibodies as part of the longitudinal assessment.” Coca said. “Obviously, you’d overwhelm nephrologists since you can’t follow up with every COVID-19 patient, so we want to do a re-stratification of these samples.”

Coca and his colleagues will examine blood and urine biomarkers after three months to determine if they help predict which patients progress with CKD. The biomarkers Coca’s team will examine are broadly associated with either inflammation, AKI, or CKD progression

The group will then create a risk score based on the samples to establish a prediction for long-term outcome. Coca said that the team will watch for changes in biomarkers found by the assay in patients who return for longitudinal visits. 

The group will passively examine a patient’s kidney behavior over time by accessing their electronic medical records following the initial sample collection.

Coca argued that a patient’s one- to three-month follow up sample — even when adjusted for EGFR, kidney function, urine albumin, and other clinical variables — contains blood markers that add additional prognostic value “above and beyond” what the clinical variables can provide. He therefore anticipates spotting critical clinical findings from the MASKeD-COVID trial.

“Because we were in a surge phase in the past few months, we did not assay a large proportion of samples from patients … and thus the first collection will be in the post-discharge phase,” Coca explained. “Ironically, the post-discharge sample is the most valuable sample for predicting [CKD] progression.”

Noting that there have been “some rumblings” from pharmaceutical companies about COVID-19 drug development, Coca said that the last aim of the study will be to research how distinct phenotypes occur for COVID-related kidney disease. By collecting kidney biopsies from a patient subset with persistent evidence of kidney disease, the team will perform transcriptomic and proteomic analysis using single-cell sequencing to further understand the condition.

Matthias Kretzler, a nephrology, computational medicine, and bioinformatics professor who leads the team at University of Michigan will also research how COVID-19 can cause lasting damage to a surviving patient’s organs in addition to the kidneys, including the heart, lungs, and the endocrine system.

July 2020 COVID-19 Update – Providers face complex set of challenges

Dr. Marjorie Bessel
Chief clinical officer
Banner Health in Phoenix

On staffing: We are using an external staffing crisis agency to bring hundreds of nurses and respiratory therapists to us to assist in staffing to meet the needs of the surge we are experiencing … We are well over 1,400 (positive or suspected COVID-19) patients per day at Banner, and what we found is the COVID patients are very labor intensive … One COVID patient doesn’t equal the labor intensity of what one patient pre-COVID was like. It’s an additional burden that is also putting stress on our staff.

On supplies: We expect the supply chain to be disrupted for some period of time. We are only in the first wave and we have every expectation there will be a second wave, (which) is likely going to be no better and possibly worse than what we are currently experiencing. Our most difficult issue right now is isolation gowns. We are going through about a million isolation gowns a month at this time, so we are being creative in that space. (We are going back to the previous decades) when we used to have cloth gowns and you would launder them. We have piloted that in a couple of hospitals and it has been really well received by our employees.” 

On preparing for the surge: We had the luxury of time to put plans into place and those plans are having to be pulled off the shelves and implemented … (The downside to that) is the community, and society in general, feeling like it wasn’t going to come to us, that we could be complacent about CDC guidelines. There is some fatigue around it. I want my life to go back to pre-COVID also, but it just isn’t in the cards for us. We still have a long way to go.

On using triage only as a last resort: There is a lot of misunderstanding that we have people not getting ventilators who need them and that is not the case. We absolutely have plans in place to do triage if it were to get to a point like that … (but) we are committed to doing everything we can not to get to that. The healthcare systems are working collectively in the state so no one system would get to such a dire situation that would have to do something like triage. We are committed to sharing the load and if we have to do a triage situation all of us in the state would do it at the same time.

Physician practice consolidation causes CARES Act grant headaches

HHS sent out $50 billion in general provider grants based on 2018 and 2019 data, and the grants were attached to Tax Identification Numbers instead of the providers themselves. That left sticky situations for hospitals, private equity funds and physicians when money was sent starting in April. In some cases thousands of dollars were on the line. HHS clarified its guidance on May 19 and 20, but didn’t notify providers of the change ahead of a June 3 deadline to submit financial information.

Providers are affected differently based on the distinct fact patterns of their acquisitions.

Hospitals could lose out if they acquired a practice between partway through 2019 and January 2020. If the grants went to the practice’s inactive TIN, the provider has to send back the funds. 

A hospital or provider group can only apply for more grant funds for the practice they purchased if the acquisition changed the gross receipts in its most recent tax return by at least 20%. If not, they can’t recover the funds.

“Hospitals will have purchased practices as they moved to create more integrated health systems, which is a wrinkle in this,” Washington Council Ernst & Young principal Heather Meade said.

The 20% cutoff appears to be an arbitrary threshold, though observers pointed out that HHS likely had to choose a cutoff for practicality’s sake.

“There’s a bright line they had to draw, and I’m not being critical,” King & Spalding partner Mark Polston said. “They had to do it, but that bright line creates problems.”

Other issues arise when a practice left a larger group. A gastroenterology practice in Washington sued to recover provider relief grant funds after it exited a larger group at the end of 2019. The practice, Gastroenterology Associates Clinical Practice, estimated in its complaint that the larger group held onto between $350,000 and $400,000 in provider grants based on services the practice provided in 2019.

According to HHS’ new guidance, larger groups don’t have to return or transfer the funds a previously owned practices provided so long as the group can attest they will use the grants to offset coronavirus-related expenses or lost revenue.

Attorneys representing Gastroenterology Associates did not return an inquiry about how the new HHS guidance affects the dispute. The lawsuit was listed in a COVID-19 complaint tracker maintained by the law firm Hunton Andrews Kurth.

Private equity firms that acquired practices would likely be somewhat insulated from the issue, said Faegre Drinker Biddle & Reath partner Isaac Willett. Private equity firms often indirectly acquire non-clinical assets from a practice, but the practice maintains its existing billing TIN and payer contracts.

However, McDermott Will & Emery partner Joshua Spielman said some private equity acquisitions of multiple practices in a geographic area result in consolidations of TINs, which means providers could have to return some of the grant money.

“It seems that there are dollars Congress intended for the healthcare system, for care they provided to patients in the world, and that money is being lost as a result of the rules,” Spielman said.

As there was more than a month between when payments started to be distributed and when HHS issued guidance on the issue, some practices reached out to a provider hotline run by UnitedHealthcare in the meantime. 

But providers have said the hotline assistance has been inconsistent. Mara McDermott, vice president at McDermott+Consulting, said she was given instruction through the hotline that conflicted with the guidance HHS ultimately issued. She said there’s a chance that other providers may have gotten similar guidance and started spending money they should have sent back. 

“There is value in having certainty, but I think the process would be better if there were some sort of timeline where it’s not the day before you attest that you find out what the rules are,” McDermott said.

A HHS spokesperson said in a statement that the department has been responsive to questions and concerns from providers, particularly those related to accepting the funds given conditions and other potentially time-constrained issues.UnitedHealthcare said it has fielded nearly 100,000 calls from providers and sent over 1 million emails about the funds, with a provider satisfaction rate of 91%.

“We continue to work with HHS to address unique provider needs as they arise,” UnitedHealthcare said in a statement.While consultants, trade associations and lawyers who advise providers said they generally appreciate HHS updating its guidance to address specific circumstances, they said the delay poses potentially thorny compliance issues. 

Mollie Gelburd, associate director at the Medical Group Management Association, said she advises members to download a version of the terms and conditions and guidance from HHS when they attest to the conditions to insulate themselves from issues later.

“With the guidance constantly changing, it’s hard to gauge the risks of accepting funds,” Gelburd said.

HHS doesn’t proactively notify providers of changes to its guidance. Advisers to providers said they have to download PDFs of the guidance daily to compare with previous versions to find out about changes. Some changes are marked with the date they were released, while some changes aren’t dated.For example, HHS on Friday changed guidance on group practices that sold or terminated a provider. HHS removed language recommending that such groups return payments if they anticipate their lost revenue and coronavirus-related costs will be “materially less” than the grant amount without labeling the change, according to a version comparison document. A HHS spokesperson said the guidance is continually updated to address providers’ questions that were not explicitly addressed in the terms and conditions for the grants. The department has also extended the initial 30-day attestation deadline to 90 days to give providers more time as HHS works through guidance on more nuanced issues, the spokesperson said.”Generally, if providers are uncomfortable, even if they have attested to the funds already they may contact HHS and proceed to return the funds,” the spokesperson said.Smaller practices may have issues keeping track of those changes, said George Hruza, a doctor who serves on the American Academy of Dermatology’s COVID-19 task force. Hruza said dermatology has seen consolidation in recent years and could be affected by the TIN guidance changes.

“Trying to make heads or tails of this not easy stuff. You need an accounting expert, and sometimes they don’t even agree on what it means,” Hruza said.

But Polston, who formerly served as a HHS deputy associate general counsel for CMS, said the evolving guidance is a result of how quickly HHS sent out the funds. He said the task of operationalizing such a large funding distribution usually would take at least a year.

“There is a lot of grumbling about the process, the interface and the new information coming out constantly, but I do think if you pause a bit and think about the task that the agency had to do, they have done a pretty good job,” Polston said.

On the provider side, Polston said practices and groups need to cautiously consider whether keeping the funds is worth a potential audit or public exposure, though it’s unclear what the full extent of consequences could be.

$100 billion COVID-19 bailout

Hospital groups are asking Congress to forgive more than $100 billion in loans the Trump administration has handed out to help providers maintain cash flow during the COVID-19 pandemic.

Provider lobbyists successfully secured $175 billion in grant funds over the last two COVID-19 relief packages, but they are arguing that isn’t enough. As Congress gears up for another major legislative push, providers are asking lawmakers to forgive or relax terms on another $100 billion in Medicare accelerated and advance payments that the Trump administration has already sent out. 

CMS expanded Medicare advance and accelerated payment programs in March, and has since given out $100 billion in loans. But the agency abruptly pumped the brakes on the program, suspending payments to Medicare Part B suppliers and “reevaluating”funding requests in Medicare Part A. CMS said they chose to suspend the program because HHS had begun distributing the $175 billion in grant funds.

Providers are now turning to Congress to overrule the decision and enact changes to make the program even more favorable. Their primary request is that Congress make the advances forgivable. 

The National Rural Health Association said that some rural hospitals were already operating on negative margins before the pandemic, and may have trouble paying back loans. The group asked lawmakers to make the loans forgivable if they are used for patient care, staff salaries, utilities, or mortgage payments.

Rex Jones, CEO of Magnolia Regional Medical Center in Magnolia, Ark., said he decided to apply for an advance payment but is trying not to spend any of the money unless absolutely necessary. Magnolia reported losses in 2016, 2017 and 2018 according to data from CMS cost reports.

“Our concern was that when you are taking the money out from an advance on an organization with negative margin, there’s no way to pay it back,” Jones said.

The American Hospital Association and American Nurses Association also asked Congress to make the advances forgivable in a letter dated Friday. But making the loans forgivable would favor providers that have a more Medicare-heavy payer mix, and would disadvantage safety-net hospitals that are also operating on thin margins. 

If lawmakers don’t accede to turning loans into grants, providers want more favorable repayment terms. CMS can begin recouping the loans by garnishing Medicare payments after 120 days. The funds then transition into high-interest loans if they aren’t paid back in a year for hospitals, or 210 days for physicians and suppliers. 

The Greater New York Hospital Association argued that hospitals may not be back to regular capacity by July or August.

“Providers must begin to repay their Medicare advance while they continue to treat COVID-19 patients, or while they are in a precarious financial situation following a COVID-19 patient surge,” GNYHA wrote.

Specifically, the Federation of American Hospitals asked lawmakers to increase the amounts of the advances, extend repayment deadlines, decrease the rate at which CMS can garnish payments, and lower interest rates.

It isn’t just hospitals who want changes to the program, as physicians also received advances. The American Medical Association generally concurred with FAH’s recommendations, and also asked that HHS be allowed to make more than one advance payment.

“We fear physician practices may not resume normal operation in the immediate term and will need additional cash flows to remain afloat for patients after the pandemic is over,” physician groups wrote in an AMA-led letter.