House Bill Looks to Keep Medicare Sequestration ‘Holiday’ in Place for Home Health Agencies, Others

U.S. Representatives Brad Schneider (D-Ill.) and David McKinley (R-W.Va.) introduced the Medicare Sequester COVID Moratorium Act last week.

If passed, the bill would extend the temporary suspension of Medicare sequestration payment reductions, giving home health agencies and other providers more financial flexibility headed into an uncertain 2021.

Since 2014, the U.S. Centers for Medicare & Medicaid Services (CMS) has been cutting Medicare reimbursements to home health providers by 2%, as directly by Congress. Under the law, payments that exceed Medicare’s cap must be returned to CMS.

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As part of a larger COVID-19 relief effort, home health providers received a reprieve from sequestration when the CARES Act passed in March. CMS suspended the 2% Medicare sequestration, effectively boosting reimbursement rates during a period some health care experts referred to as a “holiday.”

The provision is soon set to expire at the end of December, but the newly introduced legislation would extend the temporary suspension of Medicare sequestration to an undetermined date.

The aim of the bill is to help providers focus on responding to the COVID-19 emergency instead of financial challenges that may arise during this time.

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“At a time when health care workers are on the front lines battling the COVID-19 pandemic, Congress should be doing everything within their power to ease their burden,” Rep. McKinley said in a statement. “America’s health care providers continue to be stretched thin and face serious financial challenges as a result of the economic and public health crisis.”

For many home health agencies, CMS pressing pause on Medicare sequestration payment reductions has ensured that they have the resources to provide care during the public health emergency while staying afloat financially.

If the legislation doesn’t pass, this could mean trouble for providers, Matt Wolfe, a partner at law firm Parker Poe, told Home Health Care News.

“The CARES Act’s temporary suspension of Medicare sequestration payment reductions has allowed home health providers to purchase PPE, train staff, and otherwise invest in keeping patients and staff safe during the pandemic,” Wolfe said. “If this bill does not become law and the sequestration is reinstated, it will be a devastating blow for home health providers at a terrible time.”

With this in mind, the bill has also drawn support from organizations such as the Partnership for Quality Home Healthcare (PQHH).

“The Partnership, alongside the broader home health community and every other provider sector, is supportive of extending the suspension of the 2% sequestration cut for Medicare providers,” Joanne Cunningham, executive director of PQHH, told HHCN. “With COVID cases on the rise, the entire health care system continues to be challenged.”

Suspending the 2% reduction beyond 2020 is “a prudent step” that will provide much-needed support to the entire Medicare provider community and patients, she added.

PQHH is a home health care advocacy organization based in Washington, D.C.

Additionally, the bill has garnered support from organizations including the American Association for Homecare, LeadingAge, the Visiting Nurse Associations of America and the National Association for Home Care & Hospice (NAHC).

“We see an extension of the sequestration moratorium as a high priority for all Medicare providers in order to preserve our very fragile health care system,” NAHC President William A. Dombi told HHCN. “Reducing payments to health care providers, already stressed to a breaking point during the height of the pandemic, will add unnecessary risks to care.”

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