U.S. Senate votes to stop 2% Medicare physician payment cut

March 25, 2021

On March 25, 2021, the U.S. Senate voted 90-2 to pass bipartisan legislation to stop the 2% Medicare sequestration cut that would have further destabilized physician practices during the COVID-19 pandemic. The Senate bill extends the moratorium on the Medicare 2% sequestration payment cut that was set to expire on April 1. The Senate bill would stop the 2% Medicare cuts through December 31, 2021. The bill also included a technical fix to help the California Disproportionate Share Hospitals. 

The U.S. House of Representatives passed a similar bill (HR 1868) a week ago that would extend the moratorium on these cuts through the end of the public health emergency. Because the House and Senate adopted different bills, the new Senate agreement will now go back to the House for action. 

House Speaker Nancy Pelosi’s office said that the House will take up—and is expected to pass—the Senate bill when it returns from the recess on April 12. In anticipation of the bill's passage, the Centers for Medicare and Medicaid Services (CMS) said it will hold all claims with dates of service on or after April 1, 2021, for a short period without affecting providers’ cash flow. This will minimize the volume of claims that must reprocessed if Congress extends the moratorium. The Medicare contractors will automatically reprocess any claims paid with the reduction applied if necessary. 

The California Medical Association (CMA) is pleased by the bipartisan support for this important legislation to avert the Medicare sequestration cuts at a time when the viability of physician practices is so fundamentally threatened. 

The continued negative fiscal impact of the COVID-19 pandemic on physician practices is undeniable. A CMA survey in October 2020 found that 87% of physician practices are worried about their financial health due to the fallout of the COVID-19 pandemic. Even with more than 8 out of 10 practices now utilizing telehealth, the average volume of patient visits and practice revenue is still down by one third, with 25% of practices still experiencing a revenue decline of 50% or greater. While revenue is down, practice costs have gone up 14%, with practices having to purchase personal protective equipment, comply with public health disinfecting guidelines, implement telehealth and make other changes due to the pandemic.

Thank you to all the physicians who have contacted their members of Congress urging them to stop the cuts. California Senators Dianne Feinstein and Alex Padilla supported the Senate bill and all California House Democrats voted to support the House legislation, along with three California Republicans (Garcia, Kim and Valadao).


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