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March 25, 2021

The Center Advocates Against Medicare Reimbursement Cuts to Hospitals

Medicare Reimbursement CutsThe Center for Health Affairs lent its voice to efforts this month to protect hospitals from looming Medicare reimbursement cuts. In letters to the Northeast Ohio congressional delegation, The Center requested support for legislation that would extend the moratorium, set to expire at the end of March, on a 2% Medicare sequestration cut. The Center emphasized the financial pressures on hospitals resulting from the pandemic, including decreases in patient volumes and below-budget revenues. 

About Sequestration
The sequestration was brought about by the Budget Control Act of 2011, under which the federal budget was scheduled to undergo cuts, resulting in a 2% annual Medicare payment reduction. Congress delayed those cuts during the pandemic through the Coronavirus Aid, Relief and Economic Security Act. The delay initially ran through the end of 2020, and then was extended through March 31, 2021.

Hill Happenings
H.R. 1868, passed by the U.S. House on March 19, called for an extension of the moratorium through the end of this year. It would also prevent an additional cut triggered by Pay-As-You-Go (PAYGO) requirements to offset the costs of the $1.9 trillion American Rescue Plan Act passed earlier this month.

The House bill moved to the Senate, where the Medicare Sequester Relief Act (S. 748) also had been introduced and called for an extension of the moratorium through the last day of the public health emergency. Senate Republicans and Democrats are working out an agreement that, as of the press time on this story, is likely to pass that chamber. This would then head back to the House for its approval before it can go to the President for signature. 

The House is currently in recess and will return the week of April 12, allowing the moratorium to expire on March 31 before Congress is able to finish its work on the bill. However, the House is likely to pass the Senate bill upon its return and there is precedent for the Centers for Medicare and Medicaid Services (CMS) to hold claims when it knows a policy change is imminent.

Update: March 26, 2021
Later in the day on March 25, the Senate passed by an overwhelming 90-2 vote a bill that includes elimination of the 2% Medicare reimbursement cut through the end of 2021. To pay for the change, the bill would increase the fiscal year 2030 sequester cuts. The House is expected to take up the bill following its return on April 13, and the Centers for Medicare and Medicaid Services will likely hold claims until the legislation is signed into law.

For more on The Center’s advocacy work on Medicare reimbursement cuts, contact us.