Congress proposes sequester extension to pay for infrastructure bill

Despite fervent opposition from hospitals and other healthcare providers, the Senate is slated to vote on an infrastructure bill that would be financed, in part, by extending Medicare payment cuts.

The legislation, which includes $550 billion in new spending over five years for roads, bridges and other transportation projects—but nothing for hospital infrastructure—would finance a small fraction of that new spending by continuing the automatic Medicare reimbursement reductions created under budget sequestration in 2013.

These 2% annual provider payment cuts currently are due to end in 2030. Although senators did not reveal specific details about the length of the extension, previous versions included one additional year of sequestration cuts that would generate an estimated $8.7 billion in savings that could be spent on infrastructure.

The American Hospital Association and other provider groups have urged Congress not to extend the sequester.

“We understand that addressing core infrastructure needs can allow us to continue to serve our communities and our patients,” the American Hospital Association, the American Medical Association and others wrote in a letter to Senate leadership this month. “However, we are opposed to the use of an extension of mandatory Medicare sequestration as a pay-for in any infrastructure package. Additionally, we do not believe that Medicare funds should be used to pay for non-health care programs.”

Congress and President Donald Trump temporarily suspended sequestration cuts during the COVID-19 pandemic, but they are set to resume next year.

The Senate is expected to begin debate on the infrastructure package as soon as Wednesday.