Congress Expected to Pass Bill to Avert Major Medicare Cuts

The US House of Representatives passed legislation during the evening of Tuesday, December 7, that would delay significant payment cuts to Medicare providers. The Senate is expected to vote on and pass the bill in the next few days, where it would then be sent to the President’s desk to be signed into law. Assuming President Biden receives the bill, he will sign it into law.

This would represent a major advocacy win for NAHC and our members. By helping stave off the devasting rate reductions that were slated to start on January 1, 2022, Congress is recognizing that providers of all kinds, including home health agencies and hospices, continue to be historically challenged by the pandemic and unprecedented workforce shortages. Should the bill become law as expected, the delay in cuts will support the ability of NAHC members to continue serving patients and families at a time when high-quality home-based care has never been more necessary.

“NAHC commends the House for coming together to address these backward rate cuts. We now encourage our friends in the Senate to follow suit and swiftly pass this bill so home-based care providers across the country can continue to serve their communities without a major payment reduction imminently looming over their heads” said National Association for Homecare & Hospice President Bill Dombi.”

Text of the House bill can be found HERE.

The most relevant Medicare payment provisions in the House-passed bill include:

  • A three-month delay of the entire planned 2% Medicare sequester payment reductions, to be in effect January 1, 2022 – March 31, 2022 (i.e. no sequester-related payment reductions in effect for first 3 months of 2022)
  • A three-month, 1% reduction in Medicare sequester payment reductions, in effect April 1, 2022 – June 30, 2022 (i.e. a 1% across-the-board sequester-related payment reduction for Q2 of 2022)
  • A one-year delay until 2023 of the entire planned so-called PAYGO sequestration cuts, which were set to go into effect as a result of the budget deficit impact of the last major COVID-19 legislative relief package passed in March 2021. PAYGO cuts were estimated to be around $36 billion for Medicare providers.

Based on 2019 levels of Medicare spending for home health and hospice ($18.1 billion for home health; $20.9 billion for hospice), NAHC roughly estimates that the total savings across the two programs associated with this legislation reaches ~$1.85 billion.

The sequester-related delays in this bill are paid for by bumping up the sequester payment reduction amounts in the year 2030, and the PAYGO cuts are delayed for only one year until 2023. While this particular bill is very welcome news, the annual stress and threat of continued Medicare cuts is an ongoing challenge to home-based providers’ stability and predictability. NAHC is committed to fighting against harmful payment reductions and advancing sensible long-term sequestration relief.

There are other Medicare-related payment policies in the bill as well, including the maintenance of a 3 percent pay bump for Part B providers through 2022 under the Medicare Physician Fee Schedule, the delay of payment reductions tied to the clinical laboratory fee schedule, and a one-year postponement of Center for Medicare & Medicaid Innovation’s radiation oncology payment model demonstration.

Congress Expected to Pass Bill to Avert Major Medicare Cuts

The US House of Representatives passed legislation during the evening of Tuesday, December 7, that would delay significant payment cuts to Medicare providers. The Senate is expected to vote on and pass the bill in the next few days, where it would then be sent to the President’s desk to be signed into law. Assuming President…

NAHC to Congress: Stop Upcoming Medicare Cuts

The National Association for Home Care & Hospice is advancing its advocacy campaign in defense of Medicare by again urging members of Congress (see new letter) to quickly move to head off looming cuts to Medicare. NAHC first wrote to Congressional leaders in late October, urging them to work together to enact legislative proposals by year’s end that will prevent tens of billions of dollars in harmful Medicare rate cuts to health care providers.

Joining NAHC in urging Congress to stop Medicare cuts were the National Hospice and Palliative Care Association and LeadingAge.

We need to add your voices to ours, so NAHC strongly urges you to go to our Advocacy Center and send a message to your members of Congress to stop the massive looming Medicare cuts. The message has been pre-written and it will take you literally only seconds to send it with a few clicks. Please do this immediately!

The joint letter, which was sent to Senate Majority Leader Chuck Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY), Speaker of the House Nancy Pelosi (D-CA), and House Minority Leader Kevin McCarthy (R-CA), asks Congress to take action soon to delay or avert scheduled cuts to Medicare that are a result of both the re-imposition of across-the-board sequestration reductions, as well as required cuts due to the budgetary impacts of the American Rescue Plan of 2021, the massive COVID-19 relief package that became law in March 2021 (these are the so-called “PAYGO” cuts). Absent additional congressional action, these combined six percent cuts to Medicare will take effect on January 1, 2022.

Imposing drastic payment cuts on high-quality home-based care providers while we’re still battling a pandemic and cases are rising will decrease patient and family access to critical supportive services at a time when they have never been in higher demand.” Said NAHC President Bill Dombi. “We have appreciated Congress’ swift action in the past to avert these types of cuts, and we call on our champions on Capitol Hill again to delay the impending reductions so that providers can continue to serve vulnerable Medicare beneficiaries in the place they prefer – their own homes and communities.”

America’s front line health care providers continue to struggle through the COVID-19 pandemic, as well as a historically challenging workforce shortage, both of which have placed unprecedented stress on the entire health care system. Home health and hospice providers are working tirelessly to deliver the best care for patients, families and communities, despite battling major operational pressures. Ongoing financial challenges for home care providers include higher expenses for labor and supplies, lost revenues due to forgone routine visits, and increased emergency costs associated with COVID-19 surges, among others.

The pandemic remains a major threat to both patient safety and provider operational capacity. Allowing the combined scheduled Medicare cuts to take effect on January 1, 2022 will reduce access to high-quality home-based medical and social services for those individuals and families who have never needed them more.

NAHC is grateful that Congress has in the recent past taken action to delay scheduled Medicare cuts during the pandemic. This necessary relief has mitigated harmful disruptions in service delivery and access to high-quality home health and hospice care. Sadly, many of the pandemic conditions that justified the waiver of these reductions in the recent past are still with us, impacting home care providers’ ability to fully respond to the needs of the communities they serve. As such, NAHC is respectfully asking that Congress pass legislation before the end of this year that will avert the impending two percent sequestration and four percent PAYGO-induced Medicare reimbursement reductions.

NAHC will continue to advocate on this important issue for Medicare home health and hospice providers and we will update you in future editions of NAHC Report. Please stay tuned.

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HHS Announces $25.5 Billion in COVID-19 Provider Funding

  • Combined application for American Rescue Plan rural funding and Provider Relief Fund Phase 4 will open on September 29

The Biden Administration announced Friday, September 10, that the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is making $25.5 billion in new funding available for health care providers affected by the COVID-19 pandemic. This funding includes $8.5 billion in American Rescue Plan (ARP) resources for providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP), or Medicare patients, and an additional $17 billion for Provider Relief Fund (PRF) Phase 4 for a broad range of providers who can document revenue loss and expenses associated with the pandemic.

“Home health and hospice will have an opportunity to tap these new funds,” says NAHC President William A. Dombi. “Our concern is that non-Medicare, non-Medicaid home care is still not included. We have been pushing for their inclusion for months, but have seen no movement on such. These are primarily the home care companies that do home care aide services that are private pay along with VA or Area Agency on Aging  funded.”

“This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic,” said HHS Secretary Xavier Becerra. “The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need.”

Consistent with the requirements included in the Coronavirus Response and Relief Supplemental Appropriations Act of 2020, PRF Phase 4 payments will be based on providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021. PRF Phase 4 will reimburse smaller providers—who tend to operate on thin margins and often serve vulnerable or isolated communities—for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers.

 Who Is Eligible To Apply and How Will Payments Be Calculated?

Phase 4 General Distribution: Consistent with the requirements included in the December appropriations bill, PRF Phase 4 payments will be based on providers’ lost revenues and increased expenditures between July 1, 2020 and March 31, 2021. Phase 4 will also include new elements specifically focused on equity, including reimbursing smaller providers for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers, and bonus payments based on the amount of services providers furnish to Medicaid/CHIP and Medicare patient.

  • 75% of the Phase 4 allocation will calculated based on revenue losses and COVID-related expenses.
    • Large providers will receive a minimum payment amount that is based on a percentage of their lost revenues and COVID-related expenses.
    • Medium and small providers will receive a base payment plus a supplement, with small providers receiving the highest supplement, as smaller providers tend to operate on thin margins and often serve vulnerable or isolated communities.
    • HHS will determine the exact amount of the base payments and supplements after analyzing data from all the applications received to ensure we stay within our budget and funds are distributed equitably.
    • No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses.
    • HHS will continue to use risk mitigation and cost containment measures in Phase 4 to protect program integrity and preserve taxpayer dollars.
  • 25% of the Phase 4 allocation will be put towards bonus payments that are based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients.
    • HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
    • Providers who serve any patients living in Federal Office of Rural Health Policy-defined rural areas with Medicaid, CHIP, or Medicare coverage, and who otherwise meet the eligibility criteria, will receive a minimum payment.

ARP Rural Distribution: Providers who serve Medicaid, CHIP, and Medicare patients who live in rural communities are eligible for the ARP Rural payments.

  • HHS will make payments to providers based on the amount and type of Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) services provided to rural patients.
    • HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
    • Providers who serve any patients living in Federal Office of Rural Health Policy-defined rural areas with Medicaid, CHIP, or Medicare coverage, and who otherwise meet the eligibility criteria, will receive a minimum payment.

Terms and Conditions: To help ensure that these provider funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with or acquisition of another healthcare provider during their Payment Received Period. Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy.

PRF Phase 4 will also include bonus payments for providers who serve Medicaid, CHIP, and/or Medicare patients, who tend to be lower income and have greater and more complex medical needs. HRSA will price these bonus payments at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors.

Similarly, HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP and/or Medicare services they provide to patients who live in rural areas as defined by the HHS Federal Office of Rural Health Policy. As rural providers serve a disproportionate number of Medicaid and CHIP patients who often have disproportionately greater and more complex medical needs, many rural communities have been hit particularly hard by the pandemic. Accordingly, ARP rural payments will also generally be based on Medicare reimbursement rates.

In order to expedite and streamline the application process and minimize administrative burdens, providers will apply for both programs in a single application. HRSA will use existing Medicaid, CHIP and Medicare claims data in calculating payments. The application portal will open on September 29, 2021. To help ensure that these provider relief funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments. Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy.

“We know that this funding is critical for health care providers across the country, especially as they confront new coronavirus-related challenges and respond to natural disasters,” said Acting HRSA Administrator Diana Espinosa. “We are committed to distributing this funding as equitably and transparently as possible to help providers respond to and ultimately defeat this pandemic.”

To promote transparency in the PRF program, HHS is also releasing detailed information – PDF (PDF – 175 KB) about the methodology utilized to calculate PRF Phase 3 payments. Providers who believe their PRF Phase 3 payment was not calculated correctly according to this methodology will now have an opportunity to request a reconsideration. Further details on the PRF Phase 3 reconsideration process are forthcoming.

Additionally, in light of the challenges providers across the country are facing due to recent natural disasters and the Delta variant, HHS is announcing today a final 60-day grace period to help providers come into compliance with their PRF Reporting requirements if they fail to meet the deadline on September 30, 2021, for the first PRF Reporting Time Period. While the deadlines to use funds and the Reporting Time Period will not change, HHS will not initiate collection activities or similar enforcement actions for noncompliant providers during this grace period.

For more information about eligibility requirements, the documents and information providers will need to complete their application, and the application process for PRF Phase 4 and ARP Rural payments, visit: https://www.hrsa.gov/provider-relief/future-payments.

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