House and Senate Vote to Stop PAYGO Cuts

Bill would also extend the pause on the 2% Medicare sequestration cuts. The legislation now goes to President Biden to be signed into law.

Both chambers of Congress have voted to block 4 percent Pay-As-You-Go (PAYGO) cuts to Medicare reimbursement from taking effect in 2022.

On Wednesday, the House upvoted the Protecting Medicare and American Farmers from Sequester Cuts Act, and the Senate followed up by voting for the bill late today (Thursday). The legislation now goes to Pres. Biden to be signed into law.

In addition to blocking the PAYGO cuts, the legislation also extends the pause on then 2 percent sequestration cuts through March 2022. Then, it re-implements those cuts at 1 percent from April 1, 2022 to June 30, 2022, and finally returns to the full 2 percent sequestration cut in July 2022.

The 2 percent sequestration cut has been in effect since the 2012 Sequestration Transparency Act as part of a deal to get out from under the debt ceiling at the time. The CARES Act put a temporary pause on those cuts to help DMEPOS suppliers and other Medicare providers and suppliers during the COVID-19 public health emergency. However, as mentioned, the suspension is due to lapse at the end of the month.

Additionally, this week’s newly passed legislation will increase the sequestration rate in 2031 to offset the long-running deferral of the cuts.

“This is a very positive development for both HME suppliers as well as the full scope of healthcare providers who would have been impacted by these cuts,” said Tom Ryan, president and CEO of the American Association for Homecare. “With the threat of these cuts now out of the way, we can turn our attention back to advocating for Medicare reimbursement rates for HME that reflect the increased product costs and new operational expenses that suppliers are facing.

“Thanks to the HME stakeholders who helped raise awareness on these cuts during our recent Virtual Washington Legislative Conference and through thousands of letters to Capitol Hill on the issue,” he added. “We will need an even stronger push for sustainable reimbursement rates if CMS doesn’t deliver them in the pending DME rule.”

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