On December 9, 2021, the Senate passed a bill delaying reductions in Medicare payments to providers, which had been scheduled to take effect in January. The House had previously passed a bill delaying the reductions, and President Biden is expected to sign it. In all, the legislation delays nearly 10% in reductions in Medicare payments.

Specifically, the bill delays a 2% reduction due to sequestration, a 4% reduction under the Pay as You Go Act, and a 3.75% reduction to physician payments as part of the Physician Fee Schedule.

The 2% sequestration reduction resulted from a 2013 Budget Control Act, which reduction has been suspended during the Pandemic. Under the new legislation, 1% in sequestration cuts will begin in April and 2% in cuts will begin in June.

The Pay as You Go Act automatically reduces payments when spending reaches a certain threshold. The 4% reductions under this Act have been delayed until 2023.

The 3.75% in reductions to physician payments under the Physician Fee Scheduled were reduced to a .75% reduction.

The American Medical Association and other provider groups applauded the legislation, but urged Congress to find a more permanent solution to the automatic payment reductions. In a statement issued after the Senate Vote, AMA President Gerald E. Harmon, M.D. said: “The wheels of Congress don’t always move quickly, but today they did move toward preserving the viability of physician practices and maintaining access to care…There is no need to wait for the last minute to start working on systemic problems. These automatic cuts should remind members of the needed reforms.”

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