More on Reimbursement

Senate passes moratorium to Medicare sequester cuts

The 2% cut to Medicare reimbursement is delayed through the end of the year, to the relief of hospital and physician groups.

Susan Morse, Managing Editor

(Getty photo by Michael Duva)(Getty photo by Michael Duva)

The Senate on Thursday passed H.R. 1868, a bill that will prevent the 2% Medicare sequester cuts that hospitals and physicians opposed.

The bill passed with an amendment added by Senators Jeanne Shaheen, D-New Hampshire, and Susan Collins, R-Maine, to delay the Medicare payment cuts through December 31 and ensure that the cost of the delay is paid for.

The bill as amended received overwhelming support in a 90-2 vote. It needed a 60 vote majority for approval and was up against an end-of-March deadline before hospitals and other providers received a 2% cut in their Medicare reimbursement.

The House, which passed H.R. 1868 last week, is expected to approve the amended bill when members return from the congressional recess in two weeks.


The American Hospital Association and the American Medical Association both signaled their approval for preventing reimbursement cuts at a time when many providers are struggling financially to recover from the COVID-19 pandemic.

"America's hospitals and health systems thank the U.S. Senate for working in a bipartisan manner today to extend relief from pending Medicare cuts to doctors and hospitals that would have gone into effect in just a few days," said Rick Pollack, president and CEO of the American Hospital Association. "More than a year into this pandemic, hospitals, health systems and our caregivers remain on the front lines in the fight against the virus by caring for patients and vaccinating communities. While vaccines give us great hope for the future, with over 85,000 new cases and nearly 1,500 deaths due to COVID-19 yesterday alone, according to Johns Hopkins, we are not out of the woods yet and it is in everyone's interest to keep hospitals strong."

Dr. Susan R. Bailey, president of the American Medical Association said, "The Senate wisely acknowledged that cutting Medicare payments during a pandemic was ill-conceived policy. Physician practices are already distressed, and arbitrary 2% across-the-board Medicare cuts would have been devastating. When the House returns after the congressional recess, we hope it will follow suit and pass this needed legislation swiftly and with bipartisan support."

On Thursday, Senators rejected an amendment by Sen. Rick Scott, R-Florida, in a vote of 47 in favor, 50 against. Scott said that while he opposed any cuts to Medicare, his amendment would ensure that all 50 states would be treated equally.

Sen. Dianne Feinstein, D-California, spoke against the Scott amendment, saying the bill fixes a drafting error and did not provide more funds to California or any other state.

Sen. Mike Braun, R-Indiana, said the bill was to fix a problem in the American Rescue Plan, a "bill that was passed in a rushed manner with no input from Republicans." 

Republicans are concerned and confused about a provision that would prevent states from cutting taxes through 2024. Twenty-one states sent a letter to the Treasury raising concerns about the tax cut prohibition, Braun said.

Sen Joe Manchin, D- West Virginia, said nothing in the act denies states the ability to cut taxes. It simply provides that funding received under the act may not be used to offset the reduction unless it's COVID-19 related, he said.


H.R. 1868 exempts the Medicare sequester cut from the budgetary effects of the Statutory Pay-As-You-Go Act of 2010 that was triggered by passage of the $1.9 trillion COVID-19 relief bill earlier this month.
This week, Senate leaders Chuck Schumer, D-New York and Mitch McConnell, R-Kentucky, reached an agreement to extend the moratorium on the 2% Medicare sequester cut that was set to go into effect on March 31.

Republicans had pushed back against the amount of money in the $1.9 trillion American Rescue Plan. Despite the funding amount, hospitals received no additional relief or loan forgiveness, as requested by the American Hospital Association.

Sen. Rand Paul, R-Kentucky, on Thursday said the deficit has gone from $3 trillion last year to $3.5 trillion this year.

Twitter: @SusanJMorse
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