We call on Congress to waive the PAYGO cut

December 15, 2022

Our hospitals could face an estimated nearly $10 billion in cuts in 2021, in fee-for-service Medicare, if the Pay-As-You-Go cut takes effect at the end of this year.

The Statutory Pay-As-You-Go  Act of 2010 seeks to control the effects of new legislation on the budget deficit in each calendar year, by limiting increases in spending, and reductions in revenues. To date, Congress has never allowed the PAYGO cuts to go into effect.

If they did this time, it would be an additional burden on hospitals, particularly safety net hospitals which are already struggling financially, with a number of them on a watch list.

The PAYGO cut would come on top of the 2% Medicare sequester cuts.  These are a 2% reduction in Medicare payment for Medicare claims that have dates of service or dates of discharge on or after April 1, 2013.

All this would be occurring during the COVID pandemic. Many of our hospitals are going through their worst financial situation since the start of the pandemic, even as we see an increase in seasonal respiratory and flu cases.  Inflation is already causing significant cost increases for their workforce, drugs, equipment and more, even as healthcare workers are seeing greater patient acuity and longer lengths of stay. Personally, our frontline workers are facing the effects of inflation and the higher cost of living.

We urge Congress to stand by our hospitals and workers and prevent the further financial burden imposed by a Paygo cut.