The American Rescue Plan triggers automatic cuts as a part of the deficit control measure. It will result in about $36B in Medicare spending cuts in the fiscal year 2022. The latest $1.9 trillion COVID-19 relief package issued consists of multiple provisions advantageous to healthcare providers. However, it will also leave them to face significant Medicare spending cuts soon.
The Plan about THE PLAN
The American Rescue Plan Act of 2021 was passed by the House on March 10, 2021. It will funnel $8.5B to reimburse rural healthcare providers for expenses and lost revenues due to COVID-19.
The package is also said to allocate more than $100B to continue the support for COVID-19 vaccine and testing, including $10B to accelerate supplies through the Defense Production Act, more than $15B for expanding vaccine distribution and administration, and $47.8B to continue implementation of an evidence-based testing strategy.
The Cut HURTS…
Implementation of the plan is certain to trigger automatic spending cuts as a part of the deficit control measure, resulting in $36B in Medicare spending cuts in the fiscal year 2020.
Healthcare providers throughout the country have lost several billion dollars in revenue over the past year while combating the ongoing pandemic and complying with the new rules. They might face even more financial losses this year, as they expand COVID-19 vaccine and testing outreach and set up strategies for efficient vaccination.
According to a prediction made by the American Hospital Association, hospitals alone might be down by up to $122B in 2021, on top of the estimated $323B in losses the previous year.
Last month, AHA had requested that Congress include a $35B infusion to the Provider Relief Fund as part of the final legislation. However, the plan also fails to deliver any additional distributions to the Provider Relief Fund, which was one of the topmost priorities for hospital groups.
The American Medical Association has urged Congress to prevent the triggering of Medicare spending cuts as part of the implementation of the COVID-19 relief package. The healthcare system of the country has already been under immense pressure since the last year, and it seems that the pressure is only increasing with time.