Medicare Sequester Bill with RHC Grandfathering Fix Passes House


Medicare Sequester Bill with RHC Grandfathering Fix Passes House

The House of Representatives today, by a vote of 246 to 175, has passed H.R. 1868. The bill waives a 2% across the board Medicare sequester that expires at the end of March and another 4% sequester cut that would take effect in 2022. The House bill also contains several technical corrections to recently passed legislation including a provision addressing our grandfathering issue from Section 130 of the Consolidated Appropriations Act of 2021.

Specifically, the bill contains a technical correction that would:

  1. Fix the effective date for the RHC payment modernization changes passed last December from December 31, 2019 to December 31, 2020. This means that all new small (less than 50 beds) hospital-based RHCs that were certified in 2020 will have their upper payment limit based on either: their 2020 RHC payment rate (plus MEI adjustments); or the new “main” upper payment limit, whichever is higher.

  2. Extend the grandfathering provision to small hospital-based RHCs that had filed an application to enroll in the Medicare program as an RHC prior to December 31, 2020.

  3. Sets the upper limit for small hospital-based RHCs that do not have 2020 reimbursement rates at their 2021 rate plus annual MEI adjustments for 2022 and beyond.

The legislation now goes to the Senate where there is strong bipartisan support for RHC fixes. The Senate may adopt a different approach both in regards to waiving the Medicare sequestration cuts and fixing the RHC grandfathering issue. However, House passage of legislation which includes these RHC fixes is an important first step in the process.

Bill Finerfrock
Executive Director
National Association of Rural Health Clinics