Vital Signs Blog

Hospitals oppose extending Medicare sequester cuts to restore unemployment benefits

Several of the nation's largest hospital groups signed on to a joint letter Monday that urges U.S. senators to oppose cutting Medicare payments to pay for extending unemployment benefits.

The Senate is considering a proposal to extend unemployment insurance that would extend the 2% Medicare sequester cut that kicked in last year by one more year until 2024. That move is particularly upsetting to hospitals, which faced a similar scenario just last month. As part of December's two-year budget deal, Congress extended Medicare's sequester cuts—which the 2011 Budget Control Act put in place until 2021—by an additional two years to help pay for maintaining current Medicare physician payment levels and extending certain Medicare programs through the end of March.

“Clearly one concern would be that it's already been extended two years,” said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a left-of-center think tank. “If it gets extended for more years, it begins to look like something that is permanent, rather than temporary, and that's a concern to providers.”

Shawn Gremminger, assistant vice president for legislative affairs at America's Essential Hospitals, echoed that sentiment. Gremminger's group represents safety net providers and signed Monday's letter (PDF). As he explained, the approach is similar to one Congress has used with Medicaid disproportionate share (DSH) cuts scheduled under the healthcare reform law.

Under the Patient Protection and Affordable Care Act, Medicaid DSH cuts were supposed to be in effect through 2020. But Congress has extended those cuts three times to help pay for temporary SGR fixes. Hospitals did see a reprieve last month when the Bipartisan Budget Act restored Medicaid DSH cuts for 2014 and delayed the 2015 cuts until 2016. But it's the now-familiar pattern that is worrisome to hospitals.

“Once you start getting used to using this as a 'payfor,' it becomes standard operating procedure, and we're worried that's going to be the case,” Gremminger said, adding that the move would also set bad policy because it would make across-the-board cuts to Medicare when it's unclear what the program will look like in the future.

The letter from the hospital groups—including the American Hospital Association, the Federation of American Hospitals, the Catholic Health Association and the National Association of Psychiatric Health Systems—noted that hospitals already faced about $113 billion in funding cuts that have been imposed in the past three years.

Follow Jessica Zigmond on Twitter: @MHjzigmond


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