Senate votes to avert Medicare cuts to providers

The Senate on Thursday evening voted 59-34 to avert looming Medicare cuts to providers, sending the legislation to President Biden’s desk for signature.

The highly-anticipated vote comes weeks before the cuts were set to take effect, putting providers on edge as lawmakers hammered out a final deal.

The bill, which passed the House earlier this week, will 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% cuts derive from the 2011 law that created budget sequestration, requiring 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 sequestration expires in 2013.

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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, partially mitigating 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.

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