WASHINGTON — The House voted 384-38 Tuesday evening to rescind one of two scheduled Medicare cuts, sending the bill on to President Biden for his signature.
“Today the house meets on the heels of huge milestones for our country — more than 180 million vaccine shots in American arms, and more than 150 million rescue checks in Americans’ bank accounts,” said Rep. John Yarmuth (D-Ky.), chairman of the House Budget Committee. “Today’s legislation will ensure our healthcare providers who have been on the front lines of this pandemic are supported during this difficult time.”
The measure addresses one of the two budget cuts the Medicare program is facing. One cut, part of the normal budget process, is a 2% — or $18 billion — cut in the projected Medicare budget under a process known as “sequestration.” Sequestration allows for prespecified cuts in projected agency budget increases if Congress can’t agree on their own cuts. Medicare’s budget had been slated for a 2% sequester cut in fiscal year 2020; however, due to the pandemic and the accompanying increased healthcare needs, Congress passed a moratorium on the 2% cut.
That moratorium was set to expire on April 1; however, the Centers for Medicare & Medicaid Services — anticipating possible congressional action — instructed its claims processors to delay processing Medicare claims this month “for a short period” so that it wouldn’t have to reduce reimbursement and then have to re-process those claims if the moratorium was extended.
Another projected cut — this one for 4%, or $36 billion — will eventually be triggered by the COVID relief bill formally known as the American Rescue Plan Act. That legislation, which President Biden signed into law last month, must conform to the PAYGO (pay-as-you-go) Act, which requires that any legislation that has a cost to it that is not otherwise offset must be offset by sequestration-style budget cuts to mandatory programs, including Medicare.
To avoid both of those cuts, the House passed H.R. 1868, co-sponsored by Yarmuth, House Ways & Means Committee chairman Richard Neal (D-Mass.), and House Energy & Commerce Committee chairman Frank Pallone Jr. (D-N.J.), among others. That bill would get rid of the PAYGO Act requirement and extend the 2% Medicare sequester moratorium through the end of 2021.
The bill then went to the Senate, which passed it 90-2 on March 25, but the Senate version only stopped the sequestration cuts and did not address the PAYGO issue. It is the Senate version of the bill that the House approved Tuesday night by well more than the required 2/3 majority.
Yarmuth expressed disappointment that the Senate bill didn’t include a resolution to the PAYGO cut. “I’m pleased that this bill received bipartisan support in the Senate, and it is my hope it will receive broad bipartisan support in this chamber as well,” Yarmuth said before the vote. “However, I will be remiss if I do not state my disappointment that the needed legislative fix to exclude the American rescue plan from the statutory PAYGO scorecard was dropped from this measure.”
“While today’s action is an important step, our work is not done,” he added. “Next we must enact an additional legislative fix to prevent a separate PAYGO sequester, and painful and indiscriminate cuts to Medicare, farm supports, social services, resources for students and individuals with disabilities, and other programs Americans rely on. I am committed to passing this bill today and enacting a second sequester fix before the end of this session of Congress.”
Rep. Jason Smith (R-Mo.), on the other hand, was pleased that a PAYGO fix was not included. “The legislation before us today is clearly a wiser course of action than that which my House Democrat colleagues pursued just a few weeks ago,” Smith said. “Despite House Republicans specifically raising the concern over the risks House Democrats were taking with the healthcare of American seniors, our Democrat colleagues first dismissed the fact that their recently enacted $1.9 trillion dollar bailout bill would lead to billions to cut Medicare. Then, after passing their bill, and after this president signed it into law — a plan that would lead to $36 billion in cuts to Medicare — Democrats suddenly felt compelled to acknowledge that fact.”
Smith criticized House Democrats for not adopting House Republicans’ version of the bill, which was similar to the one passed by the Senate. “Thankfully, in a bipartisan vote of 90-2, the Senate agreed to the bill that is before us today,” he said. “We can and should act on the legislation before us to do what is prudent and possible to protect America’s seniors.”
Healthcare groups were relieved by the House’s passage of the bill. “The Senate and House, Democrats and Republicans, have overwhelmingly acknowledged that cutting Medicare payments during a pandemic is ill-conceived policy,” American Medical Association president Susan Bailey, MD, said in a statement. “Physician practices are already distressed, and arbitrary 2% across-the-board Medicare cuts would have been devastating.”
“Today’s action by the House is urgently needed to mitigate the pressures from COVID with hospital beds unfortunately filling again from a new surge,” Chip Kahn, president and CEO of the Federation of American Hospitals, a group representing for-profit hospitals, said in a statement. “The extension of the moratorium on the 2% Medicare sequester is a vital lifeline that will help ensure access to care for both COVID and non-COVID patients … We look froward to President Biden signing this bill into law quickly to ease the burden on clinicians and providers so they can focus on what matters most – caring for their patients and defeating the virus.”
Last Updated April 14, 2021