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Senate Passes S.610 Bill, Averting PAYGO And Sequester Cuts From Taking Effect At The Beginning Of 2022

Yesterday, the Senate passed S.610 - Protecting Medicare and American Farmers from Sequester Cuts Act, delaying implementation of an additional 4% reduction in reimbursement for Medicare providers and suppliers as well as the 2% reduction in Medicare sequestration cuts. Congress had deferred the cuts during the COVID-19 public health emergency, but the deferral is scheduled to expire at the end of this year. S.610 extends the 2% freeze until March 31, 2022, and then reduces the freeze to 1% from April 1, 2022 to June 30, 2022.

Relief from 2% Medicare Sequester

The bill would eliminate for three months the 2% Medicare sequester cuts on hospitals and others providers that are scheduled to resume Jan. 1, 2022. In addition, the legislation would reduce the 2% sequester cut to 1% from April 1, 2022 through June 30, 2022. The package would be paid for by increasing the sequester percentage in 2030.

Halting Statutory PAYGO Sequester for 2022

The bill would stop the 4% PAYGO sequester from taking effect early next year. Any cuts mandated by a sequester order for the 2022 “PAYGO scorecard” would be delayed and added to the “2023 scorecard.” This does mean Congress will need to take action in late 2022 to eliminate these cuts. The Congressional Budget Office has estimated that a Statutory PAYGO sequester in fiscal year 2022 resulting from passage of the American Rescue Plan Act of 2021 would cause a 4% reduction in Medicare spending – or cuts of approximately $36 billion.

  • Provides a three-month delay of the Medicare sequestration reductions and a three-month, one percent reduction in Medicare sequestration payment reduction.
  • Provides a one-year increase in the Medicare physician fee schedule of 3 percent to support physicians and other health professionals in adjusting to changes in the Medicare physician fee schedule during 2022.
  • Provides a one-year delay of Medicare payment reductions to the clinical laboratory fee schedule and the private payer laboratory data reporting requirements.
  • Provides a one-year delay of the implementation of the Medicare radiation oncology model.
  • Increases funding for the Medicare Improvement Fund by $101,000,000.
  • Prevents Statutory PAYGO sequestration through 2022, preventing automatic across-the-board cuts to Medicare, farm programs, social services, student loans, resources for students and individuals with disabilities, among other programs.
  • The bill would create in law a one-time expedited process lasting through January 16, 2022, for the Senate to consider legislation increasing the debt limit by a specific dollar amount at a simple majority threshold.

Click here to view the bill summary.The bill now heads to President Biden’s desk for a signature.