- The American Hospital Association, American Medical Association and other healthcare-related trade groups have asked Congressional leaders to continue the suspension of the Medicare "sequester" well into next year.
- The sequester was part of a 2012 deal to avoid hitting the federal debt ceiling. It was suspended under the Coronavirus Aid, Relief, and Economic Security Act, but providers say the financial pain they are feeling due to the COVID-19 pandemic means it should continue to be suspended for longer.
- The request sent Wednesday comes as negotiations for another federal relief bill appear to have stalled, and some large hospital chains are feeling ongoing financial pressure related to the pandemic.
The sequester of 2012 was essentially a trade the Obama administration made with the GOP-controlled Congress at the time to ensure that the U.S. government didn't bump up against the debt ceiling. The sequester cut most Medicare payments to providers by 2%, and it has remained on the books for a better part of a decade now.
While the CARES Act suspended the sequester for calendar 2020, the COVID-19 pandemic is expected to be a public health emergency well into next year, spooking the provider community. That's been further amplified by weak earnings reports from some for-profit hospital chains such as Tenet Healthcare, which this week reported a nearly $200 million operating loss for the third quarter.
The other big for-profit chains — HCA Healthcare, Community Health Systems and Universal Health Services — all report their third-quarter earnings next week.
As a result, the AHA, AMA, the American Health Care Association and the National Association for Home Care and Hospice have asked that the suspension of the Medicare sequester continue into next year.
"Given that the public health emergency is certain to continue into 2021, it is a safe assumption that America's healthcare providers will continue to face the overwhelming financial challenges and pressures associated with higher overhead costs due to personal protective equipment and other safeguards, lost revenue due to delayed elective procedures and/or forgone routine visits, and hazard pay to staff," read a portion of the letter, which was sent to House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell and the minority ranking members of both the House and Senate.
It remains to be seen whether the entreaty will lead to any legislative action. However, the provider community received the suspension after it lobbied for it back in March, and succeeded in getting some changes to CARES Act reporting guidance after additional lobbying.
For the meantime, a second relief package intended as a followup to the CARES Act remains in limbo, although it is possible that some Congressional action may occur after the Nov. 3 presidential election.