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Hospitals Red Flag Funding Sources for $1.2T Infrastructure Plan

Analysis  |  By John Commins  
   June 29, 2021

Hospitals are voicing their opposition to the use of sequestration cuts and unspent COVID-19 provider relief funds to help pay for the plan.

The nation's biggest hospital associations are raising objections to the newly released $1.2 trillion Bipartisan Infrastructure Framework after learning that it would be partially paid for with continued sequestration cuts and unspent money from the COVID-19 provider relief funds.

In a one-page letter sent Tuesday to Senate Majority Leader Chuck Schumer, D-NY, and Minority Leader Mitch McConnell, R-KY, the American Hospital Association and eight other stakeholder associations said they supported improving "core infrastructure needs" that would allow providers to better serve their communities.

"However, we are opposed to the use of an extension of mandatory sequestration, as well as unspent COVID-19 provider relief funds, as financing sources for any infrastructure package," the letter said.

Sequestration Cuts

As part of the relief package put forward in April 2020, Congress suspended until the end of 2021 Medicare's reviled 2% across-the-board sequestration cuts that were supposed to take effect on April 1, 2020. Now, some lawmakers are looking at the cuts as a potential source of infrastructure funding.

"Congress recognized that hospitals and health systems needed relief from Medicare cuts during the pandemic and we appreciate the recently provided delay through the end of this year in the two percent mandatory reductions," the letter said.

"Unfortunately, the Bipartisan Infrastructure Framework lists a continuation of mandatory sequestration as an offset for the infrastructure agreement. Medicare funds should not be used to pay for roads and bridges. We cannot sustain additional cuts to the Medicare program."

COVID Relief Funds Tapped

The Bipartisan Infrastructure Framework identifies unused COVID relief money as a possible funding source.

But hospitals said syphoning away COVID relief money would harm health systems that "are still recovering from the impact of the pandemic, and unfortunately caseloads have increased in some areas of the country due to new virus variants and a lack of vaccinations."

"As you know, hospitals and health systems and other healthcare providers are awaiting the distribution of additional dollars in Provider Relief Funds as well as the recently allocated $8.5 billion for rural healthcare providers," the letter said.

"We would ask that none of these COVID-19 healthcare relief funds be used for the purpose of funding an infrastructure package, given the ongoing need for healthcare providers to offer assistance to their patients and communities."

The letter was cosigned by the AHA, America's Essential Hospitals, Association of American Medical Colleges, Catholic Health Association of the United States, Children's Hospital Association, Federation of American Hospitals, National Association for Behavioral Healthcare, Premier healthcare alliance, and Vizient, Inc.

“We are opposed to the use of an extension of mandatory sequestration, as well as unspent COVID-19 provider relief funds, as financing sources for any infrastructure package.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Royalty-free stock photo ID: 1115803160 Washington, DC - June 01, 2018: Ambulance car in front of United States Capitol. By Bumble Dee / Shutterstock


KEY TAKEAWAYS

The Bipartisan Infrastructure Framework identifies unused COVID relief money as a possible funding source.

But hospitals said syphoning away COVID relief money would harm health systems.


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