This Week in Washington DC – July 31, 2021

From ACG Legislative and Public Policy Council Chair, James C. Hobley, MD, MSc, FACG

This week the Biden Administration released details of a plan to modernize and overhaul the country’s infrastructure. The plan was negotiated with a bipartisan group of U.S. Senators, who helped clear the bill through a procedural vote in the Senate on Friday.

What does infrastructure have to do with GI? Sequestration and future cuts to Medicare providers could help pay for this bill (4% cut in FY 2031).

Sequestration Refresher: Sequestration is an enforcement tool that occurs when certain budgetary goals have not been met. All applicable budget accounts, unless exempted by law, are reduced by a certain percentage amount for a fiscal year. For Medicare, sequestration applies only to the portion of the payment paid to providers. Beneficiary cost-sharing amounts and amounts paid by other insurance are not reduced. When Congress needs to pass some large legislative package, for example a large COVID-19 relief package or the $550 billion infrastructure package, Congress may also use sequestration cuts to help pay for the bill as accounting “offsets.” That is why ACG monitors these large legislative packages on behalf of members. This is also why your advocacy efforts matter.

Medicare benefit payments have been subject to the 2% annual reduction limit since the mandatory sequester order was issued in FY 2013. The CARES Act, which passed last year, prevented the cut from taking effect from May 1, 2020 through December 2021 —  ACG members’ advocacy efforts helped make this happen. We need your efforts again.

How does this work in practice? If the Medicare payment for a particular service is $100 and the beneficiary has a 20% co-insurance, the beneficiary would be responsible for paying the provider the full $20 in co-insurance. The remaining 80% that is paid by Medicare would be reduced by 2%, or $1.60 in this example, resulting in a total Medicare payment of $78.40. In total, the provider would receive a payment of $98.40.

What is ACG doing about it? Last week, ACG and a coalition of specialty societies urged Congress to prevent looming Medicare reimbursement cuts in CY 2022. This week, ACG met with physician members of Congress, urging legislative action on these important issues impacting clinical gastroenterology. These cuts are unacceptable and unwarranted.

We Need Your Help: There is also legislation that waives Medicare sequestration cuts through the end of the federally declared public heath emergency (PHE). The PHE was last renewed on July 19, 2021. Please urge Congress to waive these cuts!