Biden signs into law delay of Medicare payment sequester cuts for rest of 2021

The US Capitol Building
The House passed legislation Tuesday to extend a moratorium for the rest of the year to ensure that a 2% cut to Medicare payments doesn't go back into effect. (Stephen Emlund / GettyImages)

President Biden signed into law legislation that pauses a 2% cut to Medicare payments through the rest of 2021. 

Biden signed the law on Wednesday, nearly a day after the House voted 384-38 to pass the legislation for another extension of a moratorium on the cuts created under the sequester. Congress initially paused the cuts last year at the onset of the pandemic and have made several extensions since.

Technically the moratorium on the cuts ended on March 31 and the cuts went back into effect. However, the Centers for Medicare & Medicaid Services announced earlier this month that it was holding claims payments to ensure that providers are not impacted by the cuts.

Provider groups who have been lobbying Congress for another delay applauded the House vote.

“As this pandemic continues to push our frontline caregivers to the brink and stretch the resources of hospitals, 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,” said Chip Kahn, president and CEO of the Federation of American Hospitals.

America’s Essential Hospitals, which represents safety-net providers, said that hospitals are continuing to “face heavy financial pressure from their front-line responses to COVID-19.”

Now attention from provider groups shifts to efforts to ensure another cut to Medicare payments do not go into effect.

The $1.9 trillion COVID-19 rescue package passed by Congress last month triggered a 4% cut to Medicare payments under the Statutory Pay As You Go Act, which requires across-the-board cuts if spending reaches a certain threshold.

“Like the sequester, the PAYGO cut would undermine essential hospitals response to COVID-19 and their work to keep communities healthy and safe,” said Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals.