Home Health & Hospice Week

Medicare and PAYGO sequestration cuts should get put on ice.

Home health and hospice agencies won’t have to ring in the new year with steep budget cuts, if all goes as expected in the U.S. Congress.

At press time, the House of Representatives had passed a wide-ranging budget bill that addresses two major concerns for HHAs and hospices — the 2 percent Medicare sequestration payment cut to Medicare rates, and the 4 percent Pay-As- You-Go (PAYGO) sequestration cut required by the Statutory Pay-As-You-Go Act of 2010.

For a time, it appeared Congress would not take on those cuts in year-end budget legislation, which had providers worried. “Both … were written into law years ago and do not take into account today’s economic realities, the global pandemic, or the ongoing national shortage of healthcare workers,” the National Hospice and Palliative Care Organi­zation said in a Dec. 2 statement. “The two cuts combined would mean a 6 percent reduction of Medicare payments to America’s hospices starting in January, while they continue to provide the same level of end-of-life and bereavement care for patients and their families.”

But resolving the issues enjoyed bipartisan support, points out attorney James Fleischmann with law firm Polsinelli in Washington, D.C. Thus, lawmakers heeded providers concerns — perhaps in large part due to hospital lobbying — and passed the Protecting Medicare and American Farmers from Sequester Cuts Act (S. 610).

The legislation suspends the 2 percent Medicare sequestration for three months (January-March), then reduces it to a 1 percent cut for another three months (April-June). The 2 percent cut would return in full in July.

It also postpones the PAYGO 4 percent cut for a year, to January 2023. But it pays for that by increasing sequestration in 2030.

The Senate is expected to pass the legislation by the end of the week, and President Biden is expected to sign it into law.

“This would represent a major advocacy win for NAHC and our members,” the National Association for Home Care & Hospice celebrates in a statement. “By helping stave off the devastating rate reductions that were slated to start on January 1, 2022, Congress is recognizing that providers of all kinds, including home health agencies and hospices, continue to be historically challenged by the pandemic and unprecedented workforce shortages.”

NAHC “roughly estimates that the total savings across the two programs associated with this legislation reaches about $1.85 billion,” the trade group calculates.

The expected delay in cuts “will support the ability of NAHC members to continue serving patients and families at a time when high-quality home-based care has never been more necessary,” NAHC adds.

The sequester relief “shows that Congress has heard our concerns that it makes no sense to put the financial squeeze on Medicare service providers in the middle of an ongoing pandemic public health emergency, a challenging economy and a healthcare workforce shortage,” says NHPCO CEO Edo Banach in a Dec. 7 release.

However, “of course, as generally occurs, the suspension of payment reductions is, for now, pushed down the road,” not eliminated, notes consulting firm The Health Group in Morgantown, West Virginia, in its electronic newsletter.

“This debate about sequestration cuts to Medicare never ends,” Banach criticizes. “The fact that we keep having this debate shows that annual, automatic, 2 percent cuts based on ten-year-old thinking have done nothing to address the core issues. It’s time for Congress to do away with the sequester,” he demands.

“While this particular bill is very welcome news, the annual stress and threat of continued Medicare cuts is an ongoing challenge to home-based providers’ stability and predictability,” NAHC says. “NAHC is committed to fighting against harmful payment reductions and advancing sensible long-term sequestration relief.”