Today, the Federation of American Hospitals (FAH) sent a letter to leaders of the House and Senate urging lawmakers to waive the statutory Pay-As-You-Go (PAYGO) – which left unaddressed would result in a mandatory cut of four percent in Medicare spending, or an estimated $36 billion in 2022 alone.  FAH called upon Congress to address PAYGO as a component of extending government funding set to expire on September 30, 2021.

“Such extreme cuts would have a long-lasting and devastating impact on patient care, which is unconscionable amid a public health crisis,” said FAH President and CEO Chip Kahn.

The letter points out that the potential four percent cut due to PAYGO – resulting from the enactment of the American Rescue Plan Act of 2021 (ARPA) – will only be exacerbated by the ending of the two percent Medicare sequestration moratorium  – slated to happen December 31, 2021. When taken together, hospitals and providers could be facing a six percent total cut to Medicare payments – something that will have a direct impact on patients as the pandemic continues to rage across the nation.

“This will be detrimental to all of us as we face the unrelenting surge in COVID-19 cases and hospitalizations due to the Delta variant as well as the potential spread of new COVID variants, stagnation in vaccine uptake, breakthrough cases among vaccinated populations, and an unpredictable fall and winter season,” Kahn said.

The letter recommends that Congress use the upcoming government funding package to waive the harmful impact of PAYGO.

You can read the complete letter here.