Congress passes short-term spending bill that extends 2 key rural hospital programs

Congress has cleared a short-term spending bill that includes extensions of two programs aimed at helping rural hospitals, punting the issue and others into December.

The House voted 230 to 201 to advance to President Joe Biden’s desk a continuing resolution that funds the federal government through Dec. 16. Biden is expected to sign the legislation. The short-term package gives providers another chance to include key end-of-the-year policy priorities such as delays to Medicare doctor payment cuts and extensions of a key quality bonus. The legislation also extends through Dec. 16 the hospital payment adjustment for certain low-volume hospitals (LVH) and the Medicare-Dependent Hospital (MDH) program. Both programs were set to expire after September.

The programs have helped shore up finances for rural hospitals that have been vulnerable to closures in recent years and strained further due to the COVID-19 pandemic.

MDH boosts payments to eligible hospitals that have a high share of Medicare patients, and the LVH gives a pay adjustment for a hospital with a small volume of such patients.

There remains legislation in the House and Senate to keep the programs going for several more years.

The Dec. 16 deadline gives provider groups one last chance to stave off incoming payment cuts before they go into effect in 2023. Doctor groups are hoping to get lawmakers to delay a 4% mandatory cut under the PAYGO law, which mandates reductions if government spending reaches a certain threshold.

Doctors also hope Congress will act and head off a looming 4.5% cut to Medicare payments outlined in the Physician Fee Schedule.

Providers have launched an extensive lobbying campaign to convince lawmakers to keep around a 5% bonus payment to physicians if they enter an alternative payment model. The bonus goes away after this year, and advocates are worried about doctors losing a key aid in the startup costs for value-based care.