2% Cut to Home Health Agencies, Other Medicare Providers Nearing Unwanted Return

Among its many provisions, last year’s Coronavirus Aid, Relief and Economic Security (CARES) Act pressed pause on the government’s 2% payment cut to all Medicare-reimbursed health care providers.

The “sequestration holiday” was immediately seen as a common-sense lifeline for cash-strapped home health providers on the front lines of the COVID-19 pandemic, many of whom had to figure out how to pay for expensive personal protective equipment (PPE) for the very first time.

Originally, the pause on Medicare sequestration was supposed to conclude at the end of 2020. A subsequent coronavirus relief package, however, extended the holiday through March of this year — which is coming up fast.


“Medicare has been burdened with a 2% sequestration annually since 2013,” William A. Dombi, president of the National Association for Home Care & Hospice (NAHC), said during a fireside chat at the Home Health Care News PDGM Summit on Wednesday. “The sequestration has been put in a pause at this point. It has been since last March. But that pause will run out at the end of this month of March.”

The Washington, D.C.-based NAHC is currently in the process of asking lawmakers to again extend the sequestration pause. It sent a letter to Congress along with five other health care advocacy groups on Tuesday.

Those groups included the American Health Care Association (AHCA), the American Medical Association (AMA), the American Hospital Association (AHA) and the Association for Clinical Oncology (ASCO). The National Hospice and Palliative Care Organization (NHPCO) likewise signed onto the letter.


“This is the wrong time to give everybody a 2% cut,” Dombi said. “We hope they’re going to listen. They’ve listened before. But we thought we might get a longer extension in December, and we only got an extension until the end of March.”

If another extension isn’t an option, the letter also floats the idea of additional funding to counteract the 2% cut.

“Our providers are working tirelessly to deliver the best care for patients, families and communities, and we urge you to include in legislation addressing the COVID-19 pandemic additional funding to counter sequester cuts to Medicare providers,” it reads. “This funding would allow for continued support of providers’ COVID-19-related lost revenues, as well as additional expenses due to activities such as purchasing supplies and equipment, standing up emergency testing centers and the construction and retrofitting of facilities.”

In a perfect world, Congress would consider getting rid of the 2% sequestration cut entirely. But with the Medicare Trust Fund nearing bankruptcy, that’s not entirely realistic, NAHC’s leader suggested at HHCN’s PDGM Summit.

As of Wednesday, it’s too difficult to firmly say what will happen with the cut.

“We have efforts underway to get Congress to extend it,” Dombi said. “I wish I could even say I’m cautiously optimistic about it. But I can’t even say we’re cautiously optimistic.”

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