Senate passes legislation that avoids Medicare physician pay cuts

Bipartisan bill delays cuts scheduled for next year, but further action is needed

The Senate approved a bipartisan bill that has already passed the House of Representatives avoiding most of the automatic Medicare physician pay cuts scheduled to go into effect at the end of the year.

According to the Medical Group Management Association, the legislation:

  • Mitigates 3% of the -3.75% impact of the previously delayed 2021 budget neutrality adjustment to the Medicare physician fee schedule conversion factor through CY 2022;
  • Nullifies the imposition of the 4% statutory pay-as-you-go sequester resulting from the American Rescue Plan Act through CY 2022;
  • Delays and phases in reinstatement of the existing 2% Medicare sequester through June 2022; and
  • Delays cuts to physician office laboratories and the next round of data reporting.

These changes eliminate 9% of the 9.75% planned Medicare payment reductions to physician practices scheduled for Jan. 1, 2022.

While medical organizations are pleased the cuts have been delayed, groups like the MGMA are calling for a permanent solution.

"MGMA greatly appreciates Congress heeding our call to pass legislation to address significant cuts to Medicare physician payments that would have otherwise devastated medical groups at the beginning of next year,” Anders Gilberg, senior vice president, government affairs, MGMA, said in a statement. “Medical practices need business stability to provide high quality, cost-effective patient care. Temporary payment fixes at the 11th hour to address cuts that are largely the result of fiscal spending decisions unrelated to Medicare cause unnecessary disruptions to the nation’s healthcare system.”

Gilberg said Congress should refocus its attention on reforming current policies, such as the longstanding Medicare sequester, that penalize physician practices.

The American Medical Association shared similar sentiments.

“Potential reductions in Medicare payments for physician services hung over the heads of patients and practices like a sword of Damocles,” Gerald E. Harmon, MD, president, American Medical Association, said in a statement. “There is no need to wait for the last minute to start working on the systemic problems. These automatic cuts should remind members of the needed reforms. Congress can get a head start on doing the right thing when it reconvenes early next year.”