Groups Want Medicare Sequester Moratorium Through End of PHE

February 03, 2021 - Healthcare organizations from across the care continuum are calling on Congress to act before the moratorium on the 2 percent Medicare sequester expires on Mar. 31, 2021.

Congress has paused the across-the-board Medicare reimbursement cut during the COVID-19 pandemic and most recently through the Consolidated Appropriations Act of 2021. The Act passed in December 2020 provided a three-month reprieve from the cuts to support provider organizations battling the ongoing pandemic.

The moratorium, however, is slated to expire at the end of next month without Congressional intervention, leading many providers to worry about how they will make ends meet during this unprecedented time.

“The months ahead will be difficult as our nation launches an unprecedented effort to vaccinate the vast majority of Americans, while we simultaneously face the spread of new and potentially more harmful COVID-19 variants. Health care providers across the spectrum are ready to meet this challenge, but we need congressional help now,” wrote the organizations, which included industry leaders such as the American Medical Association (AMA), Federation of American Hospitals (FAH), American College of Physicians (ACP), and America’s Health Insurance Plans (AHIP).

The more than 40 organizations went on to ask Senate and House leaders to extend the moratorium on the Medicare sequester through the end of the public health emergency, which HHS has indicated will continue through the end of the year.

“We need every resource at our disposal to meet the significant challenges that remain, especially as health care providers continue to endure the strain caused by the pandemic. Now is not the time to cut Medicare reimbursements that are necessary to providing care to our communities,” the letter concluded. 

At the end of January, Congressman Brad Schneider (D-IL) and Congressman David McKinley (R-WV) introduced bipartisan legislation H.R. 315, the Medicare Sequester COVID Moratorium Act to extend the moratorium through the public health emergency.

Reinstating the Medicare sequester during the pandemic would “create unnecessary burdens at the worst possible time,” Congressman Schneider said.

“COVID-19 cases continue to spike across the country. The dramatic growth in cases nationwide means continued stress on our frontline health providers. Our hospitals are reporting devastating staffing shortages, overloaded ICUs, and diminishing supplies of personal protective equipment. Our health care professionals report growing burnout and hospitals are experiencing decreased revenue as more are forced to stop elective procedures,” he stated.

The legislation was backed by the coalition of healthcare organizations as well as the American Hospital Association (AHA).

In a separate letter to Congressman Schneider, AHA expressed support for H.R. 315, citing the negative consequences resuming the across-the-board Medicare cuts would have on frontline providers.

“In some cases, this 2% cut will effectively negate the Medicare inflation adjustment health care providers depend on and would otherwise receive in 2021. The cost of providing care to patients continues to increase and without future sequestration relief, America’s health care safety net could be at further risk of collapse,” AHA wrote.

The hospital group reported last year that hospitals were likely to lose more than $320 billion in 2020 alone because of higher-than-normal supply costs, the loss of elective procedures, and other impacts of COVID-19.

Further losses are expected as the pandemic continues and new challenges arise, such as vaccine distribution.

“Eliminating the Medicare sequester cuts during the PHE will provide critical financial assistance to hospitals and health systems on the front lines of the pandemic,” AHA stated in its letter.

President Joe Biden has proposed a $1.9 trillion COVID-19 relief package, which the Republicans have countered with their own $618 billion proposal.

Democrats have signaled that would forgo bipartisan support for the President’s plan by using the budget reconciliation process, which would enable them to pass the plan without the 60 votes needed in the Senate.

Critics of this strategy, however, are warning Congress that the new laws could raise the national debt, triggering offsets for programs like Medicare.

For now, healthcare organizations are urging Congress to include H.R. 315 in any COVID-19 relief packages to prevent further cuts to Medicare payments.