Hospital groups raise red flags about spending offsets in bipartisan infrastructure bill

The bill would be paid for in part by extending the duration of the 2% reduction in Medicare payments and by tapping into the Provider Relief Fund.

Leading hospital groups are calling out issues with healthcare-related spending offsets included in the recently released bipartisan infrastructure framework.

A 21-member group of Democrats and Republicans in the Senate agreed to the $1.2 trillion bill, which would pay for improvements to the nation’s transportation infrastructure along with investments in clean power, broadband and other areas. President Joe Biden announced his support for the agreement.

The bill would be paid for in part by adding to the time frame for the 2% reduction in Medicare payments. That decrease, known as sequestration, has been deferred during the COVID-19 public health emergency but is scheduled to be reinstated in 2022. Under the new bill, it would be extended through 2031 instead of 2030.

Of greater concern in the short term is a proposal to use some of the remaining money in the Provider Relief Fund to cover the new spending. The specific amount that would be diverted has not been clarified. New spending in the infrastructure bill reportedly totals $559 billion, and that is the amount due to be offset by reductions to various programs.

There is $32.5 billion remaining in the Provider Relief Fund, including $8.5 billion for rural healthcare providers, but nothing has been distributed since the Phase 3 general distribution in December and January. The U.S. Department of Health and Human Services has not announced a timetable for sending out additional payments.

In a letter to Senate Majority Leader Chuck Schumer (D-N.Y.) and Minority Leader Mitch McConnell (R-Ken.), nine hospital groups requested that other mechanisms be found to pay for infrastructure improvements.

“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 groups wrote.

A secondary disappointment for hospital advocates may involve what’s not in the bipartisan bill. Biden’s initial proposal, known as the American Jobs Plan, included $400 billion to bolster home- and community-based healthcare, but those provisions were left out of the bipartisan framework. Democrats could try to pass them in a partisan budget reconciliation bill later this year, but the outlook for any such legislation is uncertain.

In addition, the American Hospital Association had pushed for some infrastructure spending to be targeted to healthcare. Such priorities generally aren’t addressed in the bipartisan framework, although a significant investment in broadband would support expanded telehealth availability.