AHA, AMA Urge Congress to Prevent Medicare PAYGO Sequester

Seven national healthcare organizations, including the American Hospital Association (AHA) and the American Medical Association (AMA), have asked Congress to prevent the Statutory Pay-As-You-Go (PAYGO) sequester from taking effect.

AHA, AMA, the American Health Care Association, National Association for Home Care and Hospice, National Hospice and Palliative Care Organization, Association for Clinical Oncology, and AdvaMed sent a letter to congressional leaders requesting action.

The groups emphasized that the sequester would lead to $38 billion in Medicare payment cuts in 2023. This stands to exacerbate the already existing financial challenges hospitals, physician practices, and other healthcare facilities are facing.

Inflation, rising labor expenses, and supply chain shortages have made it difficult for facilities to maintain access to care for patients, the letter stated.

In previous years, including 2021, Congress passed legislation to avoid the PAYGO sequester. The healthcare organizations are calling on leaders to do the same before the year ends.

If Congress does not act, providers will face a 4 percent cut to Medicare payments in 2023. This would be in addition to the 4.5 percent decrease in the Medicare conversion factor that CMS finalized in the 2023 Physician Fee Schedule (PFS), resulting in a total payment reduction of 8.5 percent.

Physician groups have voiced their concerns about the upcoming Medicare payment policies and have urged Congress to prevent reimbursement cuts.

“Ninety percent of medical practices reported that the projected reduction to 2023 Medicare payment would reduce access to care,” Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association (MGMA), said in a public statement. “This cannot wait until next Congress — there are claims processing implications for retroactively applying these policies.”

The Federation of American Hospitals (FAH) wrote to congressional leaders in October asking them to waive the PAYGO sequester requirements and permanently reauthorize the Medicare-dependent Hospital (MDH) program and the current Low-Volume Hospital (LVH) program, which increase financial support for rural hospitals and providers.

An MGMA report detailed how medical groups may have to limit the number of new Medicare patients they see and reduce clinical staff to ensure financial stability amid future Medicare payment cuts.

“As a regional safety net academic Health System in one of the poorest regions of the country, we will not stop caring for our Medicare patients. However, our ability to maintain a sustainable financial situation will be so challenging,” a multispecialty group employing 1,800 physicians in urban Alabama said. “We are already stretched due to increasing labor and supply costs – a cut in Medicare would be beyond anything we could manage.”