06/20/2022

REMINDER: Additional Medicare Cut Coming Soon!

Without Congressional Action, a 1 Percent Cut to the Medicare Physician Fee Schedule is Scheduled for July 1st

Due to congressional action taken in December 2021, all Medicare fee-for-service claims are subject to a 1% sequestration payment reduction effective July 1, 2022, through December 31, 2022. Previously, a 1 percent cut was applied to all Medicare claims from April 1st through June 30th. This additional July cut ends the scheduled cuts for 2022.

However, other cuts temporarily postponed in last December’s legislation – including a 4% PAYGO cut associated with the cost of the American Rescue Plan – will take place in 2023, unless Congress acts to stop them.

For more on sequestration, including how it affects Medicare, see this MAC Matters article and this paper from the Congressional Research Service.

That systemic changes are still needed has never been more clear. Physicians continue to absorb unprecedented economic impacts due to the public health emergency associated with the COVID-19 pandemic. Additionally, historic inflation levels and non-negotiable, fixed insurance company reimbursement rates make it even harder for physicians across the nation to absorb or deflect further financial pressures. The current system puts not only many physicians’ financial stability in jeopardy, but also risks reducing patient access to needed health care services.

The MAC continues to work very closely with our national partners on this issue and will keep you as up to date as possible as more information becomes available.

Medicare Sequestration Timeline During the COVID-19 Public Health Emergency

• Due to financial burdens facing providers during the COVID-19 public health emergency, Congress postponed the 2 percent cut to Medicare payments triggered by federal budget sequestration scheduled to begin January 1, 2021, until April 1, 2021.
• The cuts were further delayed by congressional action until the end of 2021.
• In December 2021, Congress acted again to delay the cuts by phasing them in beginning April 1, 2022 (1 percent cut through June 30, 2022),
• Beginning July 1, 2022, an additional 1 percent cut will come into effect.