Hospitals: Don’t Pay For Infrastructure With Provider Relief, Sequester

Inside Health Policy

June 30, 2021 11:19 am

Hospitals are raising concerns that outstanding COVID-19 provider relief funds and an extension of the Medicare sequester could be used to offset the costs of the $1.2 trillion bipartisan infrastructure deal, after the White House’s outline of the framework said it would be partially offset by repurposing unused pandemic relief funds and extending the mandatory sequester. Hospital lobby groups wrote to Senate leaders Tuesday (June 29) saying Medicare shouldn’t be used to pay for unrelated projects.

“We understand the nation must address core infrastructure needs to allow us to continue to serve our communities and our patients. However, we are opposed to the use of an extension of mandatory sequestration, as well as unspent COVID-19 provider relief funds, as financing sources for any infrastructure package,” America’s Essential Hospitals, the American Hospital Association, Association of American Medical Colleges, Catholic Health Association of the United States, Children’s Hospital Association, Federation of American Hospitals, National Association for Behavioral Healthcare, Premier and Vizient, Inc. say in their June 29 letter to Senate Majority Leader Chuck Schumer (D-NY) and Senate Minority Leader Mitch McConnell (R-KY) (emphasis theirs).

President Joe Biden and a group of Republican lawmakers announced an infrastructure deal last Thursday (June 24), and a fact sheet on that agreement says “Repurpose unused relief funds from 2020 emergency relief legislation”are one of the offsets.

AHA on Friday began raising concerns about what that could mean for providers, as HHS still has not allocated $24 billion in provider relief, nor has it made $8.5 billion targeted to rural providers available.

The hospital groups’ Tuesday letter says providers still need those funds, and the money shouldn’t go toward infrastructure.

“The need for these funds remains strong, as many health care facilities are still recovering from the impact of the pandemic, and unfortunately caseloads have increased in some areas of the country due to new virus variants and a lack of vaccinations,” the hospitals say.

The Sacramento Bee reported that the offset could include COVID-19 relief funds for states like California, while the Wall Street Journal reported broadband funds included in pandemic relief legislation could be included. At press time, the White House had not responded to questions on whether provider relief funds would be included as part of that offset.

Hospitals also say that Medicare sequestration shouldn’t pay for non-Medicare projects. “We cannot sustain additional cuts to the Medicare program,” they say.

Lawmakers in April passed legislation to keep a 2% Medicare sequester cut from going into effect until 2022. However, that law didn’t include a provision from an earlier House version that also would have headed off additional sequester cuts created by the American Rescue Plan.