Some Indiana hospitals face closure without loan extension

National Politics
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INDIANAPOLIS — Indiana hospitals are begging for more time to pay off federal loans.

When officials stopped elective surgeries early in the pandemic, many hospitals applied for the Medicare Accelerated and Advance Payment Program, also known as MAAPP.

These loans have strict repayment terms, and time is running out to meet them. The repayment is due August 1 unless it is extended by Congress.

“We are anxious to hear within the next couple of days,” said Cara Veale, the CEO of the Indiana Rural Health Association. “I’m hopeful that the terms of the program have been modified.”

If it isn’t and hospitals can’t afford it, the money will be taken from Medicare reimbursements until the loan is paid in full. She said Indiana’s rural hospitals would likely close as a result.

“Rural populations tend to be older and sicker,” said Veale. “At the least an extension is probably the number one ask.”

Meanwhile, the Indiana Hospital Association is concerned about MAAPP’s interest rate.

“The interest rate, I believe, will go up to 10%, which is well above market rates,” said IHA President Brian Tabor. “We’ve asked for Congress also to consider forgiveness of the loans.”

IHA said Medicare patients will still be treated, hospitals just won’t get paid, which would have a long-term impact.

“We may see some hospitals in Indiana not be able to continue certain services or, we hope not, but start to think about things including closures,” said Tabor.

Indiana U.S. Senator Todd Young’s spokesperson Jay Kenworthy said, “Senator Young shares concerns Indiana hospitals have expressed about the repayment deadlines. He is optimistic an extension will be included in the coronavirus relief legislation to be released this week.”

What’s still unclear is whether any other repayment terms will be modified.

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