Four major healthcare associations called on lawmakers Wednesday to hold off on Medicare sequester cuts through 2021, or at least the end of the COVID-19 public health emergency.
The CARES Act suspended the planned 2% Medicare payment cut through the end of 2020, but the American Hospital Association, American Medical Association, American Health Care Association and the National Association for Home Care and Hospice said the continued stress of COVID-19 merits a longer moratorium.
"Clearly Congress recognized the importance of this relief for the duration of the (public health emergency)," the groups wrote. "Given that the PHE 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."
Providers have experienced varying financial impacts from COVID-19. While HCA returned $6 billion in CARES Act funds and accelerated payments early, nearly 60% of New Jersey providers reported negative net margins for the first half of the year. In June, AHA predicted hospitals and health systems would lose $320 billion due to the pandemic in 2020.
More than $200 billion in financial losses occurred from March to June. But the AHA expects hospitals to lose another $120 billion—about $20 billion per month—through year-end, mostly driven by lower patient volumes.
The associations maintained the moratorium would greatly help their members, calling it a "much-needed reprieve."
"This relief helped to improve what was, and continues to be, the relatively dire financial outlook for many of our members," they wrote. "In some cases, this 2% cut will effectively negate the Medicare inflation adjustment healthcare providers depend on and would otherwise receive in 2021."