Hospice Advocates: Extend Sequestration Moratorium

A number of health care industry organizations — including the National Hospice & Palliative Care Organization (NHPCO) and the National Association for Home Care & Hospice (NAHC) — have written to congressional leaders requesting an extension of the temporary suspension of reimbursement sequestration.

The U.S. Centers for Medicare & Medicaid Services (CMS) suspended sequestration for much of 2020, but that is currently slated to expire on March 31. Signatories to the extension letter included NHPCO, NAHC, American Hospital Association, American Medical Association, American Health Care Association and the Association for Clinical Oncology.

The financial strain of the pandemic is exacerbated by the fact that hospices have limited means of increasing their income to match rising expenses, as their payments are limited to the per diem from the Medicare Hospice Benefit. 

“[The moratorium] has been a lifeline. Remember, if a hospital provider or a nursing home provider has additional costs, those can be paid for through different mechanisms,” NHPCO President and CEO Edo Banach told Hospice News. “Hospices get paid a certain number of dollars each day, and that’s all they get paid. The consequences of the [sequestration suspension] has been that hospices have been able to stay afloat, especially in rural and underserved areas.”

Among the contributing factors to revenue drops is a decline in hospice length of stay for many providers, as well as increased paid leave and paid time off for staff and skyrocketing costs for personal protective equipment and supplies.

Nearly 60% of respondents to a National Association for Home Care & Hospice survey indicated that they expected their annual 2020 revenues to take a significant hit due to the coronavirus outbreak. 

Sequestration began in 2014 under the auspices of the Budget Control Act. CMS began reducing payments to hospice providers by 2% across the board as a cost control measure.

In Dec. 2020 Reps. Brad Schneider (D-IL) and David McKinley (R-WV) introduced the Medicare Sequester COVID Moratorium Act in the U.S. House of Representatives to extend the suspension for the duration of the public health emergency. However, the bill is currently sitting with the House Budget Committee, and the new $1.9 trillion relief package currently under consideration by the Senate does not contain any language on the moratorium.

A year into the pandemic, the financial impact has not gotten any easier for hospice providers. Many are contending with the same concerns they were at the beginning of the pandemic. While PPE supply chains may have improved to some extent, costs remain high, as are costs related to supporting staff and technology on top of the routine expenses of doing business.

“We’re still at the point where hospices require support. We’re still in the process of vaccinating the population and vaccinating our employees. We continue to see workforce challenges,” Banach said. “The need for workforce development and the need for technology are all things that have intensified over the course of the pandemic. We’re not yet at the point where we’ve turned that corner.”