House Votes to Extend Sequestration Moratorium for Hospice, Other Providers

The U.S. House of Representatives has voted to extend the moratorium on Medicare payment sequestration through Dec. 31. The moratorium, established through the CARES Act, was set to expire March 31. The bill will now go to the Senate.

In Dec. 2020 Reps. Brad Schneider (D-IL) and David McKinley (R-WV) introduced the Medicare Sequester COVID Moratorium Act. The bill’s language was eventually folded into H.R. 1868, which was designed to correct some provisions of the recent $1.9 trillion COVID-19 relief package related to Medicare.

“The uncertainty in COVID-19 cases across the country means continued stress on our frontline health providers,” Schneider said in a statement. “Now is not the time to reinstitute across the board cuts to our providers. We must stand by our frontline workers, and I’m proud that this delay to the Medicare sequester will support them in their mission to care for America.”


Under the auspices of the Budget Control Act, CMS in 2014 began reducing payments to hospice providers by 2% across the board. Under current law, a hospice provider must return payments to CMS if the total paid exceeds the Medicare payment cap allowance. CMS includes the sequestered 2% as part of the total, even though hospice providers never received those funds.

A number of hospice providers have reported that the moratorium positively impacted their bottom lines, including giants such as VITAS Healthcare, a subsidiary of Chemed Corp. (NASDAQ: CHE), and Amedisys Inc. (NASDAQ: AMED). The impact likely has been more profound for smaller organizations that tend to see smaller margins.

The pandemic has hurt hospices financially throughout 2020. Nearly 60% of respondents to a National Association for Home Care & Hospice survey said they expected their annual revenues to take a significant hit due to the coronavirus outbreak.


Among the contributing factors to revenue drops is a decline in hospice patient admissions and referrals amid the public health emergency, as well as increased paid leave and paid time off for staff and skyrocketing costs for personal protective equipment and supplies.

A number of health care industry organizations — including the National Hospice & Palliative Care Organization (NHPCO) and the National Association for Home Care & Hospice (NAHC) — wrote to congressional leaders requesting an extension of the temporary suspension of reimbursement sequestration. Signatories to the extension letter included NHPCO, NAHC, American Hospital Association, American Medical Association, American Health Care Association and the Association for Clinical Oncology.

“Through the relief from sequester cuts, Congress has provided critical relief to health care providers during the public health emergency,” the organizations indicated in the letter. “However, America’s health care providers continue to face overwhelming financial challenges and pressures associated with higher overhead costs due to personal protective equipment and other safeguards, lost revenue due to delayed non-emergent procedures, bonus pay to staff, and many other challenges.”

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