A bill to delay a 2% across-the-board cut to Medicare that would affect all of its providers passed the House of Representatives in a bipartisan vote Friday.
But the 246-175 vote after brief debate merely foreshadows what observers predict will be an uphill battle for approval in the Senate. The proposal would extend an existing sequestration delay through Dec. 31, something long-term care operators and others are hoping for.
The stakes are huge. The Budget Control Act of 2011 mandated federal budget cuts totaling more than $1 trillion over nine years, including the 2% annual Medicare payment cuts. Congress delayed those cuts with a provision in last year’s Coronavirus Aid, Relief and Economic Security Act.
Now, Republicans claim sequestration — automatic spending reductions triggered by unrelated budget action — is needed to help address the nation’s deficit growth. But Democrats argue that healthcare funding should not be tied to spending on other national programs, especially during the pandemic.
“This fix is needed to avoid painful cuts to our mandatory spending programs,” said Rep. Janice Schakowsky (D-IL), a co-sponsor of HB1868. “Our healthcare workers have been working non-stop for a year. They do not deserve a cut in Medicare payments for taking care of seniors and people with disabilities. By removing the sequester, we can ensure that providers keep their doors open.”
Providers from across the healthcare spectrum have aligned with powerful consumer groups, including AARP, to advocate for an extended delay. A 2% reduction would hit all providers and payers who bill Medicare and would put increased reimbursement pressures on skilled care operators who have seen costs soar due to the pandemic.
The American Health Care Association and Leading Age on Friday both praised House passage and pushed for Senate action.
“We are encouraged that the House passed a bill today that would extend the moratorium on sequester cuts,” AHCA said in a statement. “We hope the Senate will move to take action on this legislation and provide health care providers extended relief from these cuts during the public health emergency.
To ensure relief, a similar Senate bill needs 60 votes to pass before the current sequestration moratorium ends on March 31. Analysts at Skopos Labs, however, put odds of Senate passage at 1%.
It’s not just the 2% cut that’s at risk.
The $1.9 trillion American Rescue Plan also triggered an anti-deficit provision known as PAYGO, or “pay as you go” that requires Congress to offset deficit spending with automatic across-the-board cuts to the federal budget.
If Congress does not pass legislation creating an exemption, the law would require an additional 4% cut to Medicare reimbursement rates that would take effect in the fiscal year starting Oct. 1.
The bill passed by the House Friday would halt both funding cuts.A related Senate bill sponsored by Sen. Jean Shaheen (D-NH) would only delay sequestration. It has been referred to the Senate Finance Committee. As of Friday, it had three Republican co-sponsors but no hearing date.