The omicron variant should force Congress to fully pause cuts to Medicare payments made under sequestration, provider groups say.
Several advocacy groups are pressing Congress to include relief from the sequester cuts, which fully go back into effect this summer, in a potential omnibus spending deal that must pass the chamber by Feb. 18. Groups are hoping to include an extension for a bonus to quality payments for physicians and preserving hospital eligibility for the 340B drug discount program.
Groups are hoping Congress will reverse course on legislation it passed late last year as part of another spending package. The legislation ends the 2% sequester cuts to hospitals and physicians until April 2022, then it lowers the cut to 1% for another three months, and the full 2% cut resumes in June.
But that deal was made in mid-December, and things changed dramatically for hospitals in the next month.
“When that passed [I am] not sure there was the first case of omicron, and the landscape has entirely changed,” said Jonathan Jagoda, senior vice president of legislative affairs for the Federation of American Hospitals.
The highly transmissible omicron variant has put a massive strain on hospitals that includes higher expenses for labor and other supplies.
“Now is not the time to be reducing payments to hospitals,” according to a letter from the American Hospital Association (AHA) to congressional leaders Thursday.
Now, groups are hoping to link a moratorium on the 2% cuts to the end of the public health emergency, which was recently extended through April. Currently, providers say they need more certainty over funding.
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The AHA also wants Congress to suspend any repayments that hospitals must make under the Accelerated and Advance Payments Program for six months. In March 2020, the Trump administration gave out more than $106 billion in advance Medicare payments to hospitals and certain other providers to help blunt the financial impact of COVID-19.
Hospitals had a year to start repaying the loans until the Centers for Medicare & Medicaid Services (CMS) started to garner a percentage of the facility’s Medicare claims. AHA wants to extend that deadline by another six months.
AHA’s list of priorities also includes another $25 billion for the Provider Relief Fund, which is intended to give direct financial aid to providers to plug massive revenue holes caused by the pandemic. The CARES Act, passed in 2020, allocated $178 billion for the fund, the vast majority of which has already been doled out.
The hospital group stresses that the Biden administration needs to send out the remaining funds immediately, and Congress should give another $25 billion to providers to ease the financial strain caused by omicron.
Permanence for telehealth
Several advocacy groups say the omnibus spending package could be a great opportunity to make permanent key flexibilities that led to the explosion of telehealth use by providers.
CMS at the onset of the pandemic waived key regulations on originating site, audio-only, pay parity and other barriers to reimbursement under Medicare. But those flexibilities only extend through the COVID-19 public health emergency, which was recently extended through April.
Providers have been asking Congress for months to make the flexibilities permanent, or at least for a year or two to give CMS more time to study which changes should be here to stay.
“Our patients are used to telehealth now, and they are not going to stop demanding it,” said Jamie Miller, senior director of government relations for the American Medical Group Association.
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Miller said that instead of cutting off the services, CMS should have one or two more years to figure out “the kinks and then do it permanently.”
Physician groups are also hoping to get key extensions, such as a 5% bonus for physicians in alternative payment models that will go away after this year.
“That is something that we are starting to do more advocacy on, so any opportunity to get something passed would be a good opportunity,” said Claire Ernst, director of government affairs for the Medical Group Management Association.
The policy requests come as Congress is starting to piece together the spending package. A group of House and Senate appropriators met Jan. 13 to discuss the contours of the package.
“We look forward to further conversations in the coming days, with the shared goal of finishing our work by the Feb. 18 government funding deadline,” Rep. Rosa DeLauro, D-Conn., and Sen. Patrick Leahy, D-Vermont, leaders of the House and Senate Appropriations Committees, respectively, said in a statement.