Bipartisan Legislation to Address Medicare Cuts Enacted

December 13, 2021

Congress passed and President Joe Biden signed into law last week the Protecting Medicare & American Farmers from Sequester Cuts Act.

The new law addresses several Medicare provider payment cuts slated to go into effect on January 1, 2022. Among its provisions, the law relieves the 2% Medicare “sequestration” cuts, delays the 4% Statutory Pay-As-You-Go (PAYGO) Act cuts, and mitigates Medicare physician fee schedule (PFS) cuts.

The moratorium on sequestration is extended through March 31, 2022, and the sequestration cut is reduced to 1% from April 1 to June 30, 2022. In effect, providers won’t see any Medicare payment reductions until April 1, 2022, with the full 2% sequestration cut in effect beginning July 1, 2022.

The law delays the Statutory PAYGO Act reductions by eliminating the cuts in 2022 and shifting the 2023 PAYGO scorecard balances. While this provision prevents the PAYGO sequester from taking effect in 2022, it does not remove the scorecard’s balances entirely, which means the PAYGO cuts will need to be addressed again at the end of 2022.

The law also increases the Medicare PFS conversion factor for 2022 by 3%. Absent such Congressional action, the 2022 conversion factor would be calculated without consideration of the 3.75% increase provided via the Consolidated Appropriations Act of 2021, resulting in a significant PFS cut for 2022.

Finally, the law delays Medicare payment cuts for clinical diagnostic laboratory tests resulting from implementation of the private payer rate policy until January 1, 2023, with the phase-in extended through 2025. The law also delays the reporting of private payer rates until January 1, 2023.

GNYHA will continue to oppose provider funding cuts and keep you apprised of all relevant activity in Washington, DC.