House to Consider Bill Blocking Mandatory Cuts to Medicare

Home health providers may get continued relief from Medicare sequestration after all.

On Thursday, House Majority Leader Steny Hoyer (D-Md.) announced new legislation — H.R. 1868 — aimed at stopping automatic spending cuts to Medicare and other programs. House lawmakers plan to consider the legislation this week, setting the stage for possible relief before a 2% Medicare cut kicks back in next month.

Home health providers, hospitals and other Medicare-reimbursed health care organizations had hoped to see a continued sequestration pause in the $1.9 trillion “American Rescue plan,” signed into law by President Joe Biden on Friday.


That ultimately didn’t happen, however.

“The [American Hospital Association] is disappointed that the bill does not deliver more overall funding for the Provider Relief Fund, which has been crucial in supplying hospitals, health systems and other providers with resources during the pandemic,” Rick Pollack, the trade group’s president and CEO, said in a statement. “We are also concerned that this bill does not include an extension of relief from Medicare sequester cuts, which will go back into effect at the beginning of next month, and also fails to provide loan forgiveness for Medicare accelerated payments for hospitals.”

The automatic 2% cut to all Medicare providers was paused through 2020 as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act. Subsequent legislation then extended that temporary moratorium through March 2021.


The National Association for Home Care & Hospice (NAHC) is among several other health care groups calling for continued relief from sequestration.

“This is the wrong time to give everybody a 2% cut,” NAHC President William A. Dombi said at the Home Health Care News PDGM Summit earlier this month. “We hope [lawmakers are] 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.”

Instead of lasting through March, the American Hospital Association has called for an extension through the rest of 2021.

So far, the pause to Medicare sequestration has come with ample bipartisan support.

“The House will consider legislation to ensure that we preclude cuts to Medicare, as well as farm supports and other programs implicated by sequestration,” Majority Leader Hoyer said after announcing his legislation.

In addition to extending the pause on the 2% Medicare cuts, H.R. 1868 would also waive statutory pay-as-you-go (PAYGO) budget enforcement measures triggered by the deficits in the American Rescue Plan.

Broadly, PAYGO is a rule requiring that new legislation not increase the federal budget deficit or reduce the surplus. If legislation subject to PAYGO increases the deficit through an increase in federal spending or a reduction in revenues, that increase must be offset by increased revenue or reduced spending in other areas.

Without Congressional action, Medicare spending would be reduced by 4% in 2022 to balance the added spending from the $1.9 trillion American Rescue Plan, with $345 billion to be sequestered from remaining mandatory spending accounts.

The PAYGO cuts to Medicare are capped at 4%. Medicaid spending is exempt from pay-as-you-go reductions, as is Social Security, federal retirement programs, veterans’ programs and other low-income entitlement programs.

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