Most Oregon hospitals owe federal government for early pandemic loans

This spring, hospitals and well being methods within the Northwest are reporting a few of their largest monetary losses because the COVID-19 pandemic began. In some circumstances, the necessity to pay again loans granted by the federal authorities early within the pandemic is contributing to their fiscal woes.

Windfall Well being Companies, primarily based in Renton, Washington, misplaced $510 million within the first quarter of 2022. Oregon Well being & Science College, primarily based in Portland, has misplaced $64 million within the present fiscal yr, together with a $20 million loss within the month of February alone.

And the St. Charles Well being System, in Bend, misplaced $21.8 million and introduced layoffs.

All three well being methods have cited the impression of the omicron wave, inflation and the well being care labor disaster as causes for shedding cash on their operations.

Strained methods

Most hospitals have drawn on pandemic help {dollars}, from the CARES Act and different sources, to partially offset these losses.

However a lesser recognized help program, the Medicare Accelerated and Advance Funds program, supplied short-term interest-free loans, not grants. And now, the payments are coming due at a time when hospitals’ prices are rising shortly and income from affected person stays and surgical procedures is rising extra slowly.

On the outset of the pandemic two years in the past, Oregon hospitals and first care suppliers obtained greater than $1.1 billion upfront funds from Medicare, in response to information shared by the Oregon Affiliation of Hospitals and Well being Programs. The thought was to maintain the money flowing within the early disaster months of the pandemic, when elective surgical procedures have been canceled, by paying hospitals upfront for companies they would offer to Medicare sufferers sooner or later.

This system has been used up to now to assist hospitals impacted by wildfires and hurricanes. The thought is that hospitals are in a position to pay again the advances as soon as the disaster has handed and operations have returned to regular. However the pandemic has dragged on — and hospitals and well being methods are nonetheless coping with the consequences. On the similar time, the federal authorities desires to get its a reimbursement so it could actually maintain Medicare funded.

Primarily based on the variety of Medicare sufferers they deal with, PeaceHealth (headquartered in Vancouver, Washington), OHSU and the St. Charles Well being System acquired the most important advances of the methods in Oregon that took loans: $214 million, $137 million, and $94 million respectively.

Congress set the reimbursement timeline and has prolonged it as soon as already. Hospitals have lobbied, unsuccessfully, for the loans to be forgiven.

Federal makes an attempt to recoup loans

Final March, a yr after the primary funds went out, the U.S. Division of Well being and Human Companies, which oversees Medicare, started recovering these money advances by paying well being methods 25% much less for Medicare reimbursement claims. Earlier this yr, following the schedule set by Congress, they started paying simply 50% of the invoice for any service the hospital offered to a affected person coated by Medicare.

Hospitals can even decide to repay Medicare for the loans on to keep away from having their reimbursements lowered.

The Lake Well being District, in distant Lake County, Oregon, obtained about $5.2 million in grants from the Supplier Aid Fund, and a $7 million mortgage from the Accelerated and Advance Funds, which it’s now paying again.

CEO Charlie Tveit says Lake Well being District is repaying Medicare whilst he’s contemplating layoffs or cuts to companies, together with a long-term care facility and small hospice program.

“We’re taking a look at that. We are able to’t proceed to lose cash like now we have been,” he stated.

Tveit says the excessive value of hiring momentary workers by means of an company, for crucial positions Lake Well being has been unable to fill, is the first driver of the losses. Most hospital methods are brief on nurses and have been paying excessive wages for licensed nurses to journey to their hospital for brief stints. However, as Lake Well being and others have discovered, that may get costly shortly.

Lake District didn’t spend the superior funds it obtained from Medicare, because it appeared probably the mortgage would have to be repaid. Nonetheless, Tveit stated it’s irritating to be returning federal help — significantly when he can’t predict how COVID-19 may impression his future operations.

“We don’t know what’s going to occur this fall,” Tveit stated. “It’d come again with a vengeance.”