Archive for Medicare cuts


Federal Health Policy Update for Thursday, December 9

The following is the latest health policy news from the federal government as of 2:30 p.m. on Thursday, December 9.  Some of the language used below is taken directly from government documents.

Update on Efforts to Delay Medicare Sequestration Cuts

The Senate has advanced S 610, a bill that would:

  • Extend the COVID-19-driven moratorium on the long-time two percent Medicare sequestration until the end of March 2022, reducing that sequestration from two percent to one percent from the beginning of April through the end of June 2022.
  • Avoid the additional four percent sequestration necessitated by federal PAYGO rules by moving the additional spending PAYGO cuts need to offset onto the federal balance sheet for FY 2023.
  • Include a procedural provision that would enable the Senate to pass legislation to lift the debt ceiling with only 50 votes (addressing the debt ceiling will require separate legislation).
  • Reduce the 3.75 percent cut in Medicare evaluation and management rates, which Congress halted last year but that was scheduled to resume on January 1, to a 0.75 percent cut.
  • Delay certain Medicare laboratory payment cuts.
  • Delay the launch of the Radiation Oncology Model until 2023.

Final passage of this bill is expected by the end …

House to Consider Extending Medicare Sequester Delay

The moratorium on the two percent sequestration of Medicare payments could be extended under a bill the House may consider this week.

If adopted, the bill would extend the sequester delay for nine months, providing financial relief that many health care providers seek as they continue to deal with the financial challenges posed by COVID-19.

The sequester delay was implemented early in the pandemic as a means of providing additional Medicare revenue to hospitals and other health care providers at a time when many people were delaying seeking medical attention out of fear of contracting COVID-19.

Without action by Congress, the current delay of the Medicare sequester will expire at the end of March.

Learn more about the latest effort to extend the Medicare sequester delay in the Fierce Healthcare article “House to vote later this week on bill to delay Medicare sequestration payment cuts.”…

Hospitals Sue HHS Over Payment Cut

Medicare cut hospital payments $840 million a year more than it should have and now, hospitals are suing to get their money back.

According to the lawsuit, Congress authorized Medicare to include a cut of 0.7 percent in hospital inpatient payments through FY 2017 to recoup past Medicare overpayments but Medicare continued the cut, without Congress’s approval, in FY 2018 and FY 2019.

The 600 hospitals that filed the suit estimate that the allegedly illegal cut cost them about $200,000 each and now, they want their money back – with interest.

Learn more in the Becker’s Hospital Review article “622 hospitals sue HHS, accused of illegally allowing reimbursement cut.”

CBO Targets Health Care in Options for Reducing Deficit

Every year the Congressional Budget Office publishes a menu of options for reducing federal spending and the federal budget deficit.  As in the past, this year’s compendium includes a number of options to reduce federal health care spending and raises federal revenue through health care initiatives.

The cost-cutting options include:

  • establish caps on federal spending for Medicaid
  • limit states’ taxes on health care providers
  • reduce federal Medicaid matching rates
  • change the cost-sharing rules for Medicare and restrict Medigap insurance
  • raise the age of eligibility for Medicare to 67
  • reduce Medicare’s coverage of bad debt
  • consolidate and reduce federal payments for graduate medical education at teaching hospitals
  • use an alternative measure of inflation to index social security and other mandatory programs

Options to raise additional revenue include:

  • increase premiums for Parts B and D of Medicare
  • reduce tax subsidies for employment-based health insurance
  • increase the payroll tax rate for Medicare hospital insurance

Learn more about the CBO’s recommendations, how they might be implemented, and their potential implications in the CBO report Options for Reducing the Deficit: 2019 to 2028.

Hospital Government Payment Losses Could Reach $218 Billion by 2028

A recent study concluded that hospitals can expect to lose about $218 billion in federal Medicare and Medicaid payments between 2010, when the latest round of major cuts began, and 2028.

Among those cuts cited in the study, which was commissioned by the American Hospital Association and the Federation of American Hospitals, are:

  • $79 billion for DRG documentation and coding adjustments
  • $73 billion for Medicare sequestration
  • $26 billion for Medicaid disproportionate share payments (Medicaid DSH)
  • $11 billion in cuts associated with the American Taxpayer Relief Act of 2012

Other cuts came, or will be coming, through regulatory changes, the introduction of value-based payment programs, and other means.

Learn more about these cuts and their potential implications in this Healthcare Dive story.