Senate Joins House to Avert Medicare Cuts to Providers

On Thursday evening, the Senate voted 59-34 to avert looming Medicare cuts to providers, sending the legislation to President Biden's desk for signature. The bill will delay 2% cuts to Medicare rates through March 2022 and delay a separate round of 4% Medicare cuts totaling about $36 billion to 2023.

The 2% cuts are from a 2011 law that established the budget sequestration, requiring spending to be reduced across the federal government beginning in 2013. The cuts, which were paused last year in response to COVID-19, will be further delayed until April 1, after which providers will see a 1% cut until June 30, and a 2% cut thereafter until the extended expiration of sequestration (currently 2030). Health care has long advocated for the exclusion of Medicare from sequestration and will likely continue to lobby for abolishment of the law.

The 4% Medicare cuts are a result of a budget law known as PAYGO that requires increases in the deficit be offset by raising revenue or reducing spending. The American Rescue Plan Act of 2021 resulted in a larger budget deficit, triggering PAYGO spending reductions.

Other Medicare-related payment policies in the bill include the maintenance of a 3% pay bump for Part B providers through 2022 under the Medicare Physician Fee Schedule.