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New infrastructure legislation could come at the price of cuts in payments to health care providers

The bipartisan infrastructure bill is on the move in the U.S. Senate, but elements of the measure may bring cuts in Medicare payments to hospitals and physicians. Although the infrastructure bill is not final, last evening the Senate voted to move the bill forward by a vote of 67 to 32, with 17 Republicans joining all the Democrats to begin debate on the measure.

Funding for the new infrastructure package is reported to include an extension of mandatory Medicare sequestration cuts of 2% of Medicare provider payments each year through 2031. Other sources of infrastructure investment may include reducing the IRS tax gap and requiring state and local matching investments in broadband. Unspent COVID-19 provider relief funds had also been considered as a funding source.

Last week, the American Hospital Association, American Medical Association, American Health Care Association, National Association for Home Care & Hospice, National Hospice and Palliative Care Organization, and the Association for Clinical Oncology wrote to Senate majority leader Chuck Schumer and Senate GOP leader Mitch McConnell expressing opposition to the extension of the mandatory Medicare sequestration.

As noted, the infrastructure framework was thought to include as a payment source the re-purposing of unspent COVID-19 relief funds, which are reported to include billions of unspent dollars in the federal Provider Relief Funds. But Bloomberg Law News reported today that not included in the deal is a claw-back of $43.7 billion in unspent COVID relief funds marked for healthcare providers.  Sen. Ron Wyden (D-Ore.) is reported as confirming that the relief funds will be untouched.

In March of this year, Congress passed legislation to put a moratorium on the 2% sequestration cuts to Medicare payments until the end of 2021. If nothing changes in the infrastructure funding being discussed, it appears the 2% annual sequestration cuts will renew in 2022 and run through 2031.

"We understand that addressing core infrastructure needs can allow us to continue to serve our communities and our patients," the American Hospital Association, the American Medical Association and others wrote in a letter to Senate leadership this month. "However, we are opposed to the use of an extension of mandatory Medicare sequestration as a pay-for in any infrastructure package. Additionally, we do not believe that Medicare funds should be used to pay for non-health care programs."

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health care & life sciences, infrastructure, medicare, reimbursement

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