January Medicare Cuts Averted
Thanks to the Protecting Medicare and American Farmers from Sequester Cuts Act (S.610) signed into law on Fri., Dec. 10th, Medicare reductions scheduled for January have been delayed. Sequestration, the 2 percent cut to Medicare payments that began in 2013 due to the Budget Control Act of 2011, was suspended during the pandemic but had been scheduled to be reimposed starting Jan. 1, 2022. Instead, it will remain suspended for an additional three months through March 31, 2022, then be reimposed as a 1 percent cut for three months starting on April 1, 2022. Finally, it will return as a 2 percent cut starting July 1, 2022. Sequestration is a payment cut to the Medicare payment received by a provider, not a rate reduction.
Even more importantly, the same legislation delays for a year the Pay-As-You-Go (PAYGO) requirements that would have reduced Medicare payments by as much as 4 percent starting in January 2022. While the delay is only a reprieve at this point, it does allow additional time for Congress to develop a more permanent fix.
Finally, S.610 also restores much of the reduction that had been made to the conversion factor when Medicare Part B rates are calculated. Instead of a 3.75 percent reduction, the conversion factor is reduced by 0.75 percent. Part B rates are updated on a calendar year basis, so this change is also effective Jan. 1, 2022.
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