Hospital Groups Want Congress to Delay 2% Medicare Sequester Cuts

UPDATE 12/03/2021: Congress passed a continuing resolution Thursday night, averting a government shutdown. However, it did not address pending cuts to Medicare reimbursement for hospitals and physicians.

The American Hospital Association (AHA) and other hospital groups are calling on Congress to delay the 2 percent Medicare sequester cuts slated to go into effect on January 1, 2022.

A bill previously passed by Congress paused the Medicare reimbursement cuts for healthcare providers through the end of 2021 to support healthcare providers as they continue to combat COVID-19. The law was initially supposed to go into effect on April 1, 2021.

 A return of these payments will financially threaten healthcare providers already facing financial burdens caused by the pandemic, the groups said.

“We appreciate the ongoing support that Congress furnished with both direct funding for health care providers and the additional relief from statutory payment adjustments, such as the delay in the application of Medicare sequestration reductions,” the healthcare organizations stated in the letter to Congress.

“If these cuts are not delayed further, hospitals and health systems would experience a reduction of $4.7 billion in fee-for-service Medicare payments in 2022,” the healthcare providers wrote. 

The leading healthcare organizations are also urging Congress to relieve providers from the impending Pay-As-You-Go sequester triggered by the American Rescue Plan Act of 2021, resulting in $9.4 billion cuts to hospital providers.

“We also are concerned about the impending deadline related to the Statutory PAYGO sequester, which requires that mandatory spending and revenue legislation not increase the federal budget deficit over a 5- or 10-year period,” said the hospital groups. 

The healthcare organizations included America’s Essential Hospitals American Hospital Association, Association of American Medical Colleges, Catholic Health Association of the United States, Federation of American Hospitals, National Association for Behavioral Healthcare, Premier Healthcare Alliance, and Vizient Inc.

The groups emphasize the persistent challenges they face due to the recent increase of COVID-19 cases, including the rise in delayed treatment for chronically ill patients.
“Our members will continue to face fiscal challenges into 2022, including: higher costs related to workforce, drugs, and supplies; expenses for pandemic preparedness and treating more medically complex patients; and the delay in the return of regular operations due to the postponement of routine care,” the healthcare providers stated.

“Additional Medicare reductions to providers are not sustainable and put our members’ ability to care for their patients at risk.”