Some Colorado hospitals struggled to pay again pandemic advances

Some Colorado hospitals struggled to pay again pandemic advances

Medical employees preforms an outpatient surgical procedure at Denver Well being on March 15, 2023 in Denver, Colorado. (Photograph by RJ Sangosti/The Denver Put up)

Whereas two Colorado hospitals confronted debilitating money crunches after they needed to repay interest-free loans from Medicare, others mentioned the money advances from the federal authorities had been a lifeline at the start of the pandemic.

The $25.2 million that Denver Well being obtained in early 2020 helped cowl each day bills after revenues plummeted through the COVID-19 stay-at-home order, treasurer Matt Watford mentioned. It could have been troublesome to repay all of sudden, however Medicare collected the cash over about 18 months, and by then revenues had recovered and different federal aid funds had arrived, he mentioned.

“It allowed us to shut that hole,” he mentioned. “It sort of took care of itself, as a result of, finally, we had been in a position to do elective surgical procedures once more.”

The funds shortfall Denver Well being confronted in 2022 was a separate drawback, Watford mentioned. The hospital misplaced about $34 million final yr, largely due to rising uncompensated care and labor prices, inflicting the legislature to fast-track $5 million in relief funds.

In Colorado, 67 hospitals and well being programs obtained a mixed $1.2 billion in advance Medicare payments through the pandemic, based on the Facilities for Medicare and Medicaid Companies. Six psychiatric and specialty hospitals obtained lower than $1 million every, whereas College of Colorado Hospital acquired greater than $217 million. Outpatient suppliers additionally had been eligible for advance funds.

Hospitals may request as much as three months’ of their common Medicare funds upfront, which they might repay over time, like an interest-free mortgage, mentioned Tom Rennell, senior vice chairman of monetary coverage and knowledge analytics on the Colorado Hospital Affiliation. That was a lifeline in mid-2020, when the amount of sufferers and procedures dropped considerably, he mentioned.

“Everybody was pondering, ‘We’ll use this and we’ll get via this, and we’ll get again on observe,’” he mentioned.

Delta Well being on the Western Slope and St. Vincent Hospital in Leadville each ran in need of money in latest months, with the necessity to repay Medicare as one issue. St. Vincent came close to closing earlier than receiving state and county funds in December, and Delta Well being introduced practically all of its money was already committed to paying off debts on the finish of March.

On Wednesday, Delta Well being introduced it was “heading in the right direction” following a $653,060 advance from the Colorado Division of Well being Care Coverage and Financing. Interim CEO Julie Huffman mentioned the advance allowed it to repay one other mortgage, liberating up money for day-to-day wants. The hospital received’t have to pay the state again, however because it obtained that cost early, it received’t get one on the usually scheduled time later this spring.

Not all rural hospitals reported problem repaying Medicare, and two mentioned they didn’t find yourself utilizing their advances. Angela Kobel, chief monetary officer at Lincoln Well being in Hugo, mentioned the cash supplied a “cushion,” however the hospital didn’t want to make use of it as revenues began to rise once more.

Sheli Steele, spokeswoman for Memorial Regional Well being in Craig, mentioned the hospital’s advances additionally stayed within the financial institution. Memorial Regional really hosted extra surgical procedures than typical at some factors, when bigger hospitals couldn’t carry out nonemergency procedures, and likewise benefited from different stimulus funding and paycheck safety loans, she mentioned.

“When it got here time to repay the Medicare accelerated cost cash, we had the funds,” she mentioned.

The Facilities for Medicare and Medicaid Companies may situation advance funds earlier than the pandemic, however just for pure disasters or different uncommon circumstances. The company additionally would usually begin recouping that cash instantly, however congressional acts in March and October 2020 gave hospitals a yr earlier than it may acquire.

For the primary 11 months after cost got here due, the federal company may withhold 25% of what Medicare would usually pay every month, until it recouped the amount of the advance. If that didn’t repay the debt, it may take 50% of Medicare funds for an additional six months. If that also wasn’t sufficient, and the hospital didn’t ship cash to repay its remaining advance, the company may begin charging 4% curiosity.

The entire Colorado recipients repaid their advances, and as of Nov. 30, so had about 99% of recipients nationwide. The reimbursement schedule was set by regulation, so it wasn’t potential to delay collections when prices began rising, a Facilities for Medicare and Medicaid Companies consultant mentioned.

The funds had been profitable in serving to hospitals get via the rapid crunch, however after they got here due in 2021 and 2022, hospitals had been going through totally different monetary hurdles, mentioned Rennell, of the Colorado Hospital Affiliation. Prices began rising, particularly for short-term staffing, and a few amenities hadn’t rebounded to their pre-pandemic affected person volumes, he mentioned.

“The income got here again, however the bills got here again extra,” he mentioned. “I wouldn’t say this one factor is making it onerous for hospitals on their money move. It’s a mixture of issues.”

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