Money, Healthcare

Providers likely will get their wished-for delay on 2% Medicare sequester cuts worth billions of dollars extended through the rest of the year, thanks to a deal reached in the Senate. 

Senators have agreed to vote on the proposal this week before adjourning Friday for a two-week recess, according to a report in Modern Healthcare. The moratorium on the 2% sequestration of Medicare payments, which was put in place and extended during earlier COVID-19 relief packages, is set to expire Thursday, March 31.

Any Senate action would come on the heels of House lawmakers last week voting to delay the 2% across-the-board cut to Medicare through Dec. 31. The House measure also addressed the anti-deficit provision known as PAYGO, or “pay as you go,” which was triggered by the passage of the $1.9 trillion American Rescue Plan. PAYGO requires Congress to offset deficit spending with automatic across-the-board cuts to the federal budget. The House exempted that funding cut. 

If the Senate does not pass similar legislation creating an exemption, the law would require an additional 4% reduction to Medicare reimbursements that would take effect in the fiscal year starting Oct. 1. 

The bill expected to be voted on by Senators this week would only delay sequestration and doesn’t address the PAYGO issue, according to the Modern Healthcare report. The House is also expected to approve the Senate’s version easily. 

Long-term care and other healthcare advocates have argued that American’s healthcare safety net could be at risk of collapse without ongoing sequestration relief because providers will continue to see higher overhead costs and lost revenue through 2021.

“Many care providers are still struggling to catch up from the crippling cost of COVID,” LeadingAge President and CEO Katie Smith Sloan said in a statement Wednesday. “Cutting support for older Americans in the middle of a pandemic makes no sense. The Senate needs to head off these billions of dollars in Medicare sequestration cuts by April 1.”

The 2% sequestration reduction to Medicare payments has been in place since 2013. A 2013 analysis found that it would reduce payments to skilled nursing facilities by $9 billion over 10 years.