Congress Averts 2% Sequester Cuts, Fixes Rural Health Clinic Glitch

March 25, 2021

On March 25, the U.S. Senate passed legislation supported by the Wisconsin Hospital Association (WHA) that will extend Medicare Sequester relief for hospitals and fix a drafting error that would have cut federal reimbursements for certain provider-based rural health clinics (RHCs). The legislation, H.R. 1868, passed on an overwhelmingly bipartisan 90-2 vote.

The U.S. House of Representatives had passed H.R. 1868 last week, but it was not expected to be taken up by the U.S. Senate due to “PAYGO” violations—specifically, it exempted the sequester relief and spending from the previously passed American Rescue Plan Act from rules that normally require additional funding offsets.

Earlier this week, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell announced a deal on a Senate amendment to H.R. 1868 authored by Sens. Jeanne Shaheen (D-N.H.) Susan Collins (R-Maine) that extends the moratorium on the 2% sequester cuts through the end of 2021 and provides spending offsets in fiscal year 2030. The CARES Act had delayed these hospital sequester cuts for all of 2020, and the 2021 Consolidated Appropriations Act further delayed them through March 31, 2021.

This amended version of H.R. 1868 also includes similar language to the RHC-fix legislation introduced last week by Congressman Ron Kind (see last week's edition of the The Valued Voice). The 2021 Consolidated Appropriations Act reformed how RHCs are reimbursed in an attempt to narrow the gap between capped and uncapped RHCs. Unfortunately, it included a drafting error that would unintentionally take away cost-based reimbursement from RHCs that came online after 2019, requiring them to receive the new capped rate. This legislation grandfathers any RHC that had an application on file with the federal government prior to the end of 2020, preserving their ability to receive cost-based reimbursement.

Now the legislation heads back to the U.S. House, where it is expected to be concurred in before it can be signed by President Joe Biden.

For more information, contact WHA Vice President of Federal and State Relations Jon Hoelter.

This story originally appeared in the March 25, 2021 edition of WHA Newsletter