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AAMC Joins Letter Opposing Medicare Sequestration Extension

April 24, 2015

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PRESS CONTACTS
Len Marquez, Senior Director, Government Relations

The AAMC April 21 joined eight hospital associations, including the American Hospital Association, Federation of American Hospitals, and the Children’s Hospital Association, in a letter to Congress strongly opposing the use of Medicare sequestration cuts through 2024 to offset partially the cost of the Trade Adjustment Assistance (TAA), and for other purposes Act of 2015 (H.R. 1892), international trade legislation unrelated to the Medicare program, that was approved April 23 by the Ways and Means Committee.

Urging lawmakers to strike the language, the groups call the extension of Medicare sequestration “unacceptable,” at a time when, “hospitals are already facing more than $121 billion in cuts imposed since 2010, and are projected to experience this year the lowest Medicare margin - negative 9% - ever recorded.” The letter also states “while we do not have concerns with the continuation of the TAA program, we strongly object to any additional hospital Medicare cuts to pay for it.”

The legislation extends the Medicare sequester cuts, originally passed in the Budget Control Act (BCA) of 2011, to partially offset the cost of the legislation. This is not the first time sequestration has been used as an offset. Last year, Congress offset the cost of patching the Sustainable Growth Rate (SGR) formula, by extending and front-loading Medicare sequester cuts in the first-half of FY 2024. The TAA bill would extend the Medicare sequester throughout the second half of the year at .25 percent, which according the Congressional Budget Office, would save $700 million.

The Senate Finance Committee April 22 passed respective trade legislation similarly offset by the extension of Medicare sequester. Before passage, Sen. Mark Warner (D-Va.) offered, but ultimately withdrew, an amendment to replace the Medicare sequester extension with an offset related to mortgage reporting requirements.

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