While two Colorado hospitals faced debilitating cash crunches when they had to repay interest-free loans from Medicare, others said the cash advances from the federal government were a lifeline at the beginning of the pandemic.

The $25.2 million that Denver Health received in early 2020 helped cover daily expenses after revenues plummeted during the COVID-19 stay-at-home order, treasurer Matt Watford said. It would have been difficult to repay all at once, but Medicare collected the money over about 18 months, and by then revenues had recovered and other federal relief funds had arrived, he said.

“It allowed us to close that gap,” he said. “It kind of took care of itself, because, eventually, we were able to do elective surgeries again.”

The budget shortfall Denver Health faced in 2022 was a separate problem, Watford said. The hospital lost about $34 million last year, mostly because of increasing uncompensated care and labor costs, causing the legislature to fast-track $5 million in relief funds.

In Colorado, 67 hospitals and health systems received a combined $1.2 billion in advance Medicare payments during the pandemic, according to the Centers for Medicare and Medicaid Services. Six psychiatric and specialty hospitals received less than $1 million each, while University of Colorado Hospital got more than $217 million. Outpatient providers also were eligible for advance payments.

Hospitals could request up to three months’ of their average Medicare payments in advance, which they would repay over time, like an interest-free loan, said Tom Rennell, senior vice president of financial policy and data analytics at the Colorado Hospital Association. That was a lifeline in mid-2020, when the volume of patients and procedures dropped significantly, he said.

“Everyone was thinking, ‘We’ll use this and we’ll get through this, and we’ll get back on track,'” he said.

Estes Park Health’s experience showed both the benefits and difficulties that came with the payments. The Medicare advances were important early in the pandemic, when the number of people visiting the hospital dropped precipitously, CEO Vern Carda said. They allowed the hospital to keep paying employees and cover routine expenses until patient volume rebounded, he said.

“Those payments were extremely helpful,” he said. “Estes Park Health would have struggled without them.”