Congress has been weighing whether to cut Medicare spending since 2011, but it looks like, once again, these cuts are going to be delayed at least until the end of 2021. The Budget Control Act, which passed in 2011, included annual 2% cuts to Medicare spending as part of the government’s plan to reduce the debt and deficit; Congress has repeatedly voted to overturn the law, though, and the cuts have never gone into effect. When the pandemic hit last March, the cuts were again pushed off with the passing of the CARES Act, but were meant to go into effect on April 1. Now, President Biden has signed a bill to continue to delay these cuts until December.
The Budget Control Act
The Budget Control Act of 2011 Act proposed caps on Medicare spending from the years 2012 through 2021 in order to reduce the deficit by $1.2 trillion over that period. The Act included cuts to other programs, which would have gradually decreased each year; but for Medicare, cuts would have remained at 2% every year from 2014-2021. The cuts would have impacted payments made to providers and insurance plans, meaning Medicare providers would have billed Medicare as usual, but would only have been reimbursed at a rate of 98 cents on the dollar.
Delaying The Medicare Cuts
These controversial cuts to Medicare, though, were never actually implemented, with Congress continually voting not to put them into place. The cuts were set to finally go into effect on April 1, so CMS held off processing any Medicare claims in April until Congress debated and voted on delaying the cuts. And now, with the pandemic, President Biden and the CMS have decided to push back the cuts again, so that doctors can get properly reimbursed for dealing with higher-than-usual patient loads during the current crisis.
Doctors have made clear their position on this bill and the cuts it includes: “We strongly oppose these arbitrary across-the-board Medicare cuts, and the predictably devastating impact they would have on many already distressed physician practices,” James L. Madara, MD, CEO and executive vice president of AMA, said in March.
“The months ahead will be difficult as our nation launches an unprecedented effort to vaccinate the vast majority of Americans, while we simultaneously face the spread of new and potentially more harmful COVID-19 variants. Health care providers across the spectrum are ready to meet this challenge, but we need congressional help now,” leading industry groups wrote to top lawmakers in February.The latest version of the law was passed by the House of Representatives in a 384 to 38 vote in favor of the bill, which had already passed 90 to 2 in the Senate. After the bill was passed, CMS directed Medicare contractors to release any claims held in April.
The new provision of the law will hold off any Medicare reimbursement cuts until December 31, 2021.