The National Partnership for Hospice Innovation (NPHI) has called on U.S. congressional leaders to pursue legislation that would further extend the moratorium on Medicare sequestration during the COVID-19 public health emergency. The suspension is currently slated to expire Dec. 31.
Medicare sequestration was established in 2014 by the Budget Control Act. The practice reduced payments to hospice and other health care providers by 2% across the board.
Under current law, hospice providers 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 hospices do not receive those funds.
“The moratorium has allowed for our members to continue providing uninterrupted care to hundreds of thousands of Americans’ by ensuring that not‐for‐profit hospice providers across the nation are appropriately compensated for lost revenues and extraordinary expenses related to COVID‐19,” NPHI President Carol Fisher and Founder and CEO Tom Koutsoumpas wrote to lawmakers.
NPHI is an industry advocacy group with more than 70 not-for-profit, community-based hospice, palliative, and advanced illness care provider members.
The pandemic has been hurting hospices financially since it began. 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.
Hospices have contended with declines 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.
These financial pressures can be particularly devastating for small nonprofit organizations. These hospices tend to generate margins in the 3% range, according to the Medicare Payment Advisory Commission (MEDPAC). Though some of these providers operate on margins as low as 1%.
The original moratorium, established through the CARES Act, expired March 31, prompting CMS to halt claims processing temporarily until they received direction from Congress on sequestration. Lawmakers in April extended the suspension through the end of this year.
“Absent additional relief, some providers may be unable to remain financially viable, which would have an especially negative impact on individuals residing in rural and underserved communities,” Fisher and Koutsoumpas wrote. “Therefore, given the continuing crisis, it is critical that forthcoming legislative vehicles include measures, such as the sequestration moratorium, to mitigate further provider losses during the pandemic.”
Companies featured in this article:
