AHA urges Congress to provide relief from forthcoming Medicare sequester cuts

The AHA today urged congressional leaders to include in year-end legislation provisions to extend the moratorium on Medicare sequester cuts and to prevent the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO) sequester from taking effect at the end of this session of Congress. 
 
“Congress to date has provided much-needed assistance to health care providers in the form of Medicare sequester relief,” AHA wrote today to congressional leaders. “In addition, Congress has always acted to waive the Statutory PAYGO law on a bipartisan basis. Congress should extend the moratorium on the Medicare sequester and prevent a Statutory PAYGO sequester to ensure that no reductions in Medicare payments to providers occur early next year.”   
 
The Budget Control Act of 2011 requires, among other things, mandatory across-the-board reductions in certain types of federal spending, also known as sequestration. Medicare claims incur a 2% reduction. Congress has passed legislation extending the current moratorium on the cuts through Dec. 31; however, without further action, hospitals could see a $4.7 billion cut to Medicare fee-for-service payments beginning next year. 
 
Separately, the Congressional Budget Office estimated that a Statutory PAYGO sequester in fiscal year 2022 resulting from passage of the American Rescue Plan Act of 2021 would cause a 4% reduction in Medicare spending — or cuts of approximately $36 billion — if Congress does not act. Medicare fee-for-service payments to hospitals make up about one-quarter of total Medicare spending; as a result, hospital providers could see about $9.4 billion in cuts without congressional action.