House Delays Medicare 2% Sequester Cuts Through 2021

President Biden is expected to sign the bill, which has already cleared the Senate.

A bipartisan U.S. House on Tuesday night voted 384-38 to delay until the end of 2021 Medicare's reviled 2% across-the-board sequestration cuts that were supposed to take effect on April 1.

The Senate passed the bill 90-2 last month and President Joseph R. Biden is expected to sign it in the coming days. To pay for the estimated $18 billion in delayed cuts, the bill increases the fiscal year 2030 sequester cuts.

American Medical Association President Susan R. Bailey, MD, said the overwhelming support in Congress for delaying the cuts "acknowledges that cutting Medicare payments during a pandemic is ill-conceived policy."

"Physician practices are already distressed, and arbitrary 2% across-the-board Medicare cuts would have been devastating," she said.

Rick Pollack, president and CEO of the American Hospital Association, said the delay was needed while hospitals and clinicians contend with the coronavirus pandemic and ongoing vaccination efforts.

"Even though our country is making great progress by vaccinating millions of people a day, it is clear that this pandemic is far from over and that there is an urgent need to keep hospitals, health systems and our heroic caregivers strong," Pollack said.

Anders Gilberg, senior vice president, government affairs, at the Medical Group Management Association, said his association was "relieved that Congress heeded our call to protect medical groups from the arbitrary 2% Medicare sequester cuts through the end of 2021."

"MGMA has long opposed the sequester cuts, a tax that penalizes medical practices for Congress’ inability to meaningfully address the country’s budgetary affairs," Gilberg said. "To reinstate the Medicare sequester in the middle of a global pandemic would threaten the viability of physician practices and adversely impact the patients they treat."

With the extension in place, Gilberg urged Congress "to work in a bipartisan manner to expeditiously pass legislation that would prevent an additional 4% Medicare spending cut next year due to the budgetary effects of the American Rescue Plan."

The bill also tweaks the rural health clinic provisions in the Consolidated Appropriations Act, 2021. Specifically, requirement that the payment rate for RHCs be capped at $100 per visit beginning April 1, 2021.

The rate will increase gradually based on the Medicare Economic Index, but the AHA said it will remain well below typical provider-based RHC rates.

The bill also includes both Medicare-enrolled RHCs located in a hospital with less than 50 beds and RHCs that have applied for Medicare enrollment as of this date.

Medicare also faces a separate 4% cut -- about $36 billion -- owing to the Pay-as-You-Go mandates that offset the cost of the American Rescue Plan Act. The House had already passed a bill eliminating PAYGO for the stimulus bill, but the Senate did not act on it.

Pollack said the AHA will continue to press Congress and the Biden administration for more "support, resources and tools" for the nation's hospitals.

"This includes continuing to advocate for more overall funding for the Provider Relief Fund, relief for hospitals and health systems with Medicare accelerated payments, hospital and health system priorities to be included in the upcoming infrastructure legislative package and Congressional action by the end of the year on Medicare cuts due to the effects of PAYGO," he said.