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In a statement submitted to the House Energy and Commerce Health Subcommittee for a April 17 on President Biden’s fiscal year 2025 Health and Human Services’ budget request, AHA expressed concern about proposed new penalties for hospitals and health systems that do not meet what the Administration defines as essential cybersecurity practices. Inpatient prospective payment system hospitals failing to meet these standards would face penalties of up to 100% of the annual market basket increase beginning in FY 2029 and potential additional penalties of up to 1% off the base payment beginning in FY 2031. Critical access hospitals that fail to adopt the practices would incur a payment reduction of up to 1%, with their total penalty capped.

“The now well-documented source of cybersecurity risk in the health care sector, including the Change Healthcare cyberattack, is from vulnerabilities in third-party technology, not hospitals’ primary systems,” AHA wrote. “No organization, including federal agencies, is or can be immune from cyberattacks. Imposing fines or cutting Medicare payments would diminish hospital resources needed to combat cybercrime and would be counterproductive to our shared goal of preventing cyberattacks. To make meaningful progress in the war on cybercrime, Congress and the Administration should focus on the entire health care sector and not just hospitals. Furthermore, for any defensive strategy imposed on the health care sector, Congress should call on federal agencies to protect hospitals and health systems — and the patients they care for — by deploying a strong and sustained offensive cyber strategy to combat this ongoing and unresolved national security threat.”