Hospital groups tell lawmakers looming Medicare cuts 'not sustainable' as officials come back

As Congress returns this week from a nearly monthlong recess, a collection of hospital groups is making sure resolution of a looming 4% cut to Medicare payments doesn’t slip through the cracks. 

The groups, led by the American Hospital Association and the Federation of American Hospitals, wrote to congressional leadership Monday calling for a waiver to the 4% in mandatory cuts to Medicare payments expected to start next year. The groups charge that the cuts could prove disastrous for facilities fighting an increase in flu and respiratory cases. 

“Many of our hospitals and health systems are experiencing their worst financial situation since the COVID-19 pandemic began,” the groups wrote. 

The groups are worried about a 4% cut mandated under the federal PAYGO law, which calls for mandatory declines if spending reaches a certain threshold. Congress has traditionally waived such cuts from taking effect, but hospital groups worry that lawmakers haven’t acted yet on the latest round of cuts, which are set to start in 2023. 

Failure to take action could result in nearly $10 billion in cuts for hospitals to swallow, the groups warn. “Medicare reductions to providers are not sustainable and put at risk our members’ ability to care for their patients,” the letter said. 

Groups say that the impact will be worse as a 2% cut to Medicare payments installed during sequestration returned this July. The sequester cuts had been on pause by Congress to help providers weather the COVID-19 pandemic’s financial repercussions. 

The Association of American Medical Colleges, the Catholic Health Association, the National Association of Behavioral Healthcare, the Premier Healthcare Alliance and Vizient were the other groups that signed on to the letter.

Providers are eyeing a Dec. 15 deadline to fund the federal government as a potential opportunity to waive the cuts, hoping that the legislation can be included in a must-pass federal spending package.

The PAYGO cuts aren’t the only big priority for provider groups during the lame duck session of Congress.

Other major priorities include extending a 5% bonus to physicians who participate in value-based care programs and legislation to remove a 4.5% cut to Medicare payments for physicians.