FAH Urges Congress to Pass Legislation to Limit Medicare Payment Cuts

As the 117th Congress nears the end of its session, the Federation of American Hospitals (FAH) has called upon congressional leaders to pass legislation that will reduce financial challenges for hospitals, including limiting Medicare payment cuts.

In 2021, Congress passed the Protecting Medicare and American Farmers from Sequester Cuts Act, which deferred the four percentage point PAYGO cuts from taking effect until the end of 2022. FAH has asked Congress to act again and prevent future reductions by fully waiving the PAYGO sequester requirements as hospitals continue to face financial challenges and staffing shortages.

FAH has also requested that Congress permanently reauthorize the Medicare-dependent Hospital (MDH) program and the current Low-Volume Hospital (LVH) program. These hospital payment programs increase financial support for rural hospitals and providers. Congress temporarily reauthorized the programs, but they are set to expire on December 16, 2022.

“It is critical that Congress reinforce fragile rural hospital finances by preventing those programs from expiring and making them permanent or, at a minimum, reauthorizing them for an extended number of years,” the letter stated. “This action would help ensure hospitals can sustain their crucial role serving patients in rural communities across America.”

The 2023 Medicare Physician Fee Schedule proposed rule included a 4.4 percent decrease in physician reimbursement rates. This update has received backlash from several physician groups that say the proposed payment decrease will exacerbate financial struggles and hurt patient access to care.

FAH asked leaders to intervene and update the Medicare physician payment system to include annual increases that account for inflation and other pandemic-related factors. This would give providers more financial stability and predictability, the organization said.

The letter also urged Congress to pass legislation that supports prior authorization reform within the Medicare Advantage program. FAH cited an HHS-OIG report that found repeated instances of improper prior authorization denials, improper payment request denials, and improper denials for lack of documentation.

The Improving Seniors’ Timely Access to Care Act, passed by the House, helped reduce unnecessary delays and denials of patient care. The letter urged the Senate to pass the companion legislation before the end of the year.

Prior authorizations are still the top regulatory burden for healthcare practices, according to data from the Medical Group Management Association (MGMA).

Additionally, Congress should enact legislation that addresses telehealth expansion, behavioral health improvements, and pandemic preparedness, FAH noted.

The American Hospital Association (AHA) also recently penned a letter to lawmakers with similar year-end requests. The trade association asked Congress to extend or make permanent the rural hospital programs, pass prior authorization reform legislation, and prevent the PAYGO sequester from taking effect.

In addition, AHA urged leaders to address workforce shortages by establishing a temporary per diem payment targeted to hospitals to help facilities manage the patient discharge backlog.

Solidifying telehealth waivers and hospital-at-home programs will also help alleviate staffing shortages, AHA said. Additionally, Congress should pass legislation to increase the number of Medicare graduate medical education (GME) slots.