House votes to avert looming Medicare cuts

Providers are poised to get relief from pending Medicare cuts under legislation the U.S. House of Representatives passed Tuesday night on a party line vote, 222-212. It now heads to the Senate where it is expected to pass as soon as this week.

The bill falls short of what providers advocated but hospitals are relieved that Congress is taking steps to block tens of millions of dollars in reimbursment reductions slated to take effect next year, American Hospital Association President and CEO Rick Pollack said.

“The AHA is pleased that the House has recognized that now is not the time to make cuts to hospitals and physicians under the Medicare program,” Pollack said in a news release. “Providers on the front lines of the fight against COVID-19 will not face additional imminent financial jeopardy as they continue to care for patients and communities.”

The legislation, released by the House Rules Committee Tuesday, would delay 2% cuts to Medicare rates through March 2022 and punt a separate round of 4% Medicare cuts totaling about $36 billion to 2023.

The 2% Medicare cuts derive from the 2011 law that created budget sequestration requiring spending reductions across the federal government beginning in 2013. Congress and President Donald Trump delayed the cuts last year as part of the federal pandemic response. The bill would keep that pause in place until April 1, after which providers would see a 1% cut until June 30 and a 2% cut until the budget sequestration expires 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 package 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.

Lawmakers argue the increase is necessary to avoid payment cuts stemming from changes the Centers for Medicare and Medicaid Services made to the fee schedule last year. Because of a budget neutrality requirement, payment increases for primary care doctors resulted in planned cuts to specialists. Congress stepped in to avert the cuts with a 3.75% increase for all doctors. Physician groups have asked Congress to again extend the pay bump.

“This legislation will bring some stability to the Medicare payment system to ensure patients can keep seeing their doctors,” Rep. Kim Schrier (D-Wash.), who authored the bill, said in a news release.

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.

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