The House and Senate are considering trade legislation that would be financed in part by $700 million from extended Medicare sequestration authority – much to the consternation of the health care provider community.

By way of background, under the “Protecting Access to Medicare Act of 2014” (PAMA), Congress “front-loaded” the Medicare reimbursement cuts under the Budget Control Act’s sequestration authority for FY 2024 to capture all of the sequestration savings during the first half of FY 2024, which fell into PAMA’s 10-year budget scoring window. Specifically, the 2% annual cap on Medicare provider payment cuts was raised to 4% for the first six months of FY 2024, and then was scheduled to drop to 0% for the second half of FY 2024.

Under trade legislation approved by the House Ways and Means Committee and the Senate Finance Committee (the Trade Adjustment Assistance Act), the sequester on Medicare spending would be extended to the second half of FY 2014, but the cap would be set at 0.25%. The Congressional Budget Office estimates that this provision would raise $700 million. The full House and Senate have not yet approved the bills, but it suggests that lawmakers are getting increasingly comfortable with using future Medicare sequestration to fund Medicare and non-Medicare programs.