Cuts in Medicare Payments to Health Care Providers are Avoided

Cuts in Medicare Payments to Health Care Providers are Avoided

Also last week, we reported that the House of Representatives was expected to take up legislation to prevent billions of dollars in cuts to Medicare payments to health care providers. Those cuts would have taken place next year if Congress failed to vote to stop them.

As it turned out, both the House and the Senate voted for the legislation to stop the cuts and the bill was sent to President Biden for his signature.

The bill will delay 2% cuts to Medicare rates through March of next year and stop a separate round of 4% Medicare cuts totaling about $36 billion until 2023.

The 2% cuts were the result of legislation passed in 2011 that required spending reductions across the federal government beginning in 2013. Congress paused the cuts last year in response to COVID-19. The bill that passed Thursday would keep that pause in place until April 1, after which providers will see a 1% cut until June 30 and a 2% cut until the provisions in the 2011 law expire in 2031.

The 4% Medicare cuts are the consequence a budget law known as PAYGO that requires increases in the deficit be offset by raising revenue or reducing spending. The COVID-19 relief legislation enacted this year resulted in a larger budget deficit, triggering spending reductions.

The bill also includes a 3% increase in pay for providers paid under the Medicare Physician Fee Schedule, partially offsetting some cuts that are set to take effect next year.

Providers have urged Congress all year to avert the cuts, arguing they are still struggling financially under COVID-19.

Most House Republicans voted against the bill because it takes steps toward raising the debt ceiling, but it has enough support from Republicans in the Senate to pass.