AHA asks Congress to stop looming Medicare cuts

The American Hospital Association is urging Congress to stop cuts to Medicare before they take effect next year, citing the uncertain trajectory of the COVID-19 pandemic and possible variants.

“Now is not the time for reductions in Medicare payments to providers,” Stacey Hughes, executive vice president of AHA wrote in a letter to Congressional leadership.

Without Congressional action, Medicare will face a 4% cut triggered by the COVID-19 relief bill that passed earlier this year.

Because the law raised the deficit, Medicare and other programs will be subject to spending cuts under the Pay-As-You-Go Act passed by Congress in 2010.

Congress is likely to waive PAYGO, avoiding the cuts, but will likely only do so at the last moment, putting providers on edge.

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The 4% cut, if it took effect, would reduce Medicare spending by $36 billion next year, according to the Congressional Budget Office.

“Congress always has acted to waive the reductions, or “wipe the PAYGO scorecard clean,” prohibiting the enacted deficit effects of legislation from causing a PAYGO sequester of Medicare or other federal spending programs. We urge Congress to again prevent these cuts,” Hughes wrote.

The AHA is also asking Congress to extend a pause of the 2% across-the-board provider reimbursement cuts which have been in effect since 2013 as a way to reduce spending.

The so-called sequester was paused by Congress during the pandemic in recognition of the financial difficulties COVID-19 posed to providers.

Those cuts are scheduled to resume Jan. 1. It’s not yet clear if Congress will consider another extension of the sequester moratorium.

The AHA said resuming the 2% reduction would cost hospitals $4.7 billion in 2022.

Supporters of sequester note its purpose is to reduce Medicare spending, and providers have lived with the cuts for nearly a decade now.

Providers have also received billions of dollars in federal aid to help them weather the pandemic.

Some large providers like HCA Healthcare appear to have bounced back from COVID-19, boasting billions of dollars in profits while smaller hospitals and physician practices continue to face financial difficulties.