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Legislation Prevents Large Medicare Cuts

Medical Billing

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Medicare was scheduled to set large physician cuts in motion at the beginning of 2022. As of December 9th, 2021, Congress has passed legislation that prevents those cuts from taking place. This legislation lessens the severity of the -3.75% impact that Medicare was planning to make by 3%. This mitigation expressed by Congress has to do with the previously delayed 2021 budget neutrality adjustments that were set to affect the physician fee schedule in 2022.

This legislation invalidates the required 4% pay-as-you-go sequester that was a result of the American Rescue Plan Act for 2022, as well as delaying reinstatement of Medicare’s current 2% sequester until March of 2022. Plans are to phase in a 1% sequester through June of 2022. “Sequestration is the automatic reduction (i.e., cancellation) of certain federal spending, generally by a uniform percentage. The sequester is a budget enforcement tool that was established by Congress in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, also known as the Gramm-Rudman-Hollings Act; P.L. 99-177, as amended) and was intended to encourage compromise and action, rather than actually being implemented (also known as triggered). Generally, this budget enforcement tool has been incorporated into laws to either discourage or encourage certain budget objectives or goals. When these goals are not met, either through the enactment of a law or the lack thereof, a sequester is triggered and certain federal spending is reduced,” (Congressional Research Service, 2021).

Further delays have been brought into motion due to this legislation being passed; cuts to physician office laboratories and the next round of data reporting are only just a few. Congress has expressed their gratitude for the thousands of letters sent by MGMA members that prevented Medicare from subjecting physician offices to payment reductions. They are still calling upon Congress to reform current policies that allow such things (such as the Medicare sequester) to take place unless a movement is made by MGMA, Congress, etc.

Medicare and Budget Sequestration.
“Medical Group Management Association.” MGMA,

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