A key hospital group wants to ensure a 4% cut to Medicare spending doesn’t go into effect as facilities are still struggling with the financial impact of the pandemic.
The Federation of American Hospitals (FAH) is asking Congress to include a delay to the 4% cut as part of a government funding package that must be passed before current funding expires Sept. 30.
The cuts will be “detrimental to healthcare providers as they face the unrelenting surge in COVID-19 cases and hospitalizations due to the delta variant as well as the potential spread of new COVID variants, stagnation in vaccine uptake, breakthrough cases among vaccinated populations and an unpredictable fall and winter season,” according to the letter to congressional leaders.
The Pay-As-You-Go Act of 2010 states that any increases in spending then trigger mandatory cuts to certain federal programs such as Medicare.
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The enactment of the COVID-19 relief package called the American Rescue Plan Act triggered a mandatory Medicare cut of four percentage points. Such a cut would result in a reduction in Medicare spending of $36 billion for the 2022 federal fiscal year that starts in October.
“Such extreme cuts will have a long-lasting and devastating impact on healthcare providers and patients alike, which is unconscionable amid a public health crisis,” the letter said.
Because government funding expires Sept. 30, the FAH believes a must-pass spending package is an enviable vehicle for Congress to delay the cuts.
It remains unclear whether Congress will work to delay the impending cuts. Lawmakers did last year put on pause a moratorium on 2% cuts to Medicare payments brought on by the sequester.
However, much to the hospital lobby’s chagrin, a roughly $1 trillion bipartisan infrastructure package resumed the cuts starting next year to help pay for the package.