Dive Brief:
- President Joe Biden on Wednesday signed legislation extending the pause on Medicare sequester cuts through the end of 2021. The cuts were put on hold through the Coronavirus Aid, Relief, and Economic Security Act, though the pause expired April 1.
- CMS told Medicare administrative contractors to hold all claims for services provided on or after the expiration date, anticipating approval of the bill after the House returned from Easter recess. The agency will automatically reprocess claims paid with the reduction applied if necessary, according to the American Hospital Association.
- To pay for the extension on the pause, the legislation will increase the cuts in fiscal year 2030.
Dive Insight:
Provider groups lobbied heavily to extend the pause that was initially put in place at the start of the COVID-19 pandemic to aid systems struggling financially.
While many have since recovered and a number of large systems even turned a profit last year, others are still strained by rising expenses and depleted revenues, an analysis from Kaufman Hall and AHA found.
But the final version Biden signed omitted an important feature from the original House version — one that would shield providers from an additional 4% Medicare sequester under budget rules to offset part of the cost of passing Biden’s $1.9 trillion America Rescue Plan.
After the Senate passed its own version, Jefferies analysts said in a report they expect follow-up legislation to be introduced and passed before October, blocking those additional Medicare rate cuts.
The legislation also makes some changes to the rural health clinic provisions in the Consolidated Appropriations Act 2021. Under the CAA, the payment rate for rural health clinics, including provider-based ones certified after Dec. 31, 2019, were capped at $100 a visit.
The new legislation changes the cutoff to Dec. 31, 2020, and includes both Medicare-enrolled rural health clinics located in a hospital with less than 50 beds and those that have submitted a Medicare enrollment application by the new date, according to AHA.
