Both chambers of Congress passed legislation this week to keep the government funded through Feb. 18. Home health agencies and other Medicare stakeholders are worried, however, about a potential 6% cut that could be coming down the pike.
The cuts come in the form of Medicare sequestration and PAYGO.
Signed into law in August 2011, Medicare sequestration is a federal savings mechanism that aims to decrease the U.S. deficit by roughly $1.2 trillion over a decade. Medicare sequestration means an automatic 2% cut for all health care providers, including home health agencies, paid through Medicare.
Due to the public health emergency, Medicare sequestration had previously been put on pause.
Meanwhile, the PAYGO sequester was established through the statutory Pay-As-You-Go Act of 2010. The PAYGO rule requires new legislation not to raise the federal budget deficit. When it does, the Office of Management and Budget (OMB) has to implement cuts to some federal spending, including Medicare.
Medicare cuts are capped at a 4% reduction for the PAYGO sequester.
Not addressing sequestration or PAYGO in the spending legislation has received pushback from the National Hospice and Palliative Care Organization (NHPCO), an Alexandria, Virginia-based membership organization for end-of-life providers and professionals.
The organization’s main criticism is that Medicare sequester cuts and PAYGO sequester cuts ignore the current economic climate, the public health emergency and the national health care labor crisis.
“Last year, a bipartisan majority recognized that cutting payments would be cruel to patients and would hurt the viability of hospices at the worst possible time — and they put a moratorium on the cuts,” NHPCO President and CEO Edo Banach said in a statement. “Since then, none of these fundamentals have changed: We’re still in the middle of the COVID-19 public health emergency, there is still a national shortage of health care workers, and hospice care remains essential.”
Several other groups have raised concerns as well, including the National Association for Home Care & Hospice (NAHC) and LeadingAge, which joined NHPCO in sending a joint letter to congressional leaders in both chambers last month.
Last year, the Coronavirus Aid, Relief and Economic Security (CARES) Act halted the automatic 2% cut to all Medicare providers. In December, this temporary moratorium was extended through March 2021.
In April 2021, Congress extended the Medicare Sequestration holiday through 2021.
Despite voicing concerns, NHPCO believes that Congress will ultimately move to address the challenges providers will face.
“While we’re disappointed that the Continuing Resolution currently under consideration does nothing to address these looming cuts, we are confident that Congress still recognizes the unique value of hospice care, and we will work to ensure these cuts are addressed in other legislation over the coming months,” Banach continued.
The American Hospital Association (AHA) has likewise called for urgent action.
“If these cuts are not delayed further, hospitals and health systems would experience a reduction of $4.7 billion in fee-for-service Medicare payments in 2022,” AHA and other groups wrote in a letter of their own.
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