AMA says pandemic is not the time for Medicare pay cut

Wisconsin Senator Ron Johnson (R) said he wanted Americans to hear everything that is contained in the $1.9 trillion stimulus bill, aka the American Rescue Plan Act of 2021, so he forced Senate clerks to read all 600 pages aloud, and now the American Medical Association is objecting to something it heard during that 10-hour, 44-minute recitation.

As written, the bill will trigger a 4% cut in Medicare payments to physicians, and that cut would come on top of a 2% cut that is currently scheduled to take effect on April 1.

Both cuts have actually been in the works for years, going all the way back to the Budget Control Act of 2011, which programmed automatic cuts to Medicare reimbursement—a process called sequestration—as a way to avoid hitting the debt ceiling. Providers got a year’s reprieve in 2012, but they kicked in 2013.

As with many things, Covid-19 changed the economics of Medicare as claims, along with payments to physicians, dropped dramatically. An analysis of Medicare claims data conducted by the AMA found “spending dropped as much as 57% below expected pre-pandemic levels in April 2020. And, while Medicare spending on physician services partially recovered from the April low, it was still 12% less than expected by the end of June 2020. During the first half of 2020, the cumulative estimated reduction in Medicare physician spending associated with the pandemic was $9.4 billion (19%). Results from an earlier AMA-commissioned survey of 3,500 practicing physicians conducted from mid-July through August 2020 found that 81 percent of respondents were still experiencing lower revenue than before the pandemic,” according to James L. Madara, MD, AMA CEO.

Physicians got a break when Congress paused the planned 2020 2% sequester until the end of 2020 as part of the first stimulus relief package, the CARES Act. The moratorium was extended last December as part of the second stimulus package (the Consolidated Appropriations Act, 2021) but that extension will expire March 31.

In a March 5 letter to Speaker of the House Rep. Nancy Pelosi (D-CA), Senate Majority Leader Senator Charles Schumer (D-NY), and minority leaders Senator Mitch McConnell (R-KY) and Rep. Kevin McCarthy (R-CA), Madara pleaded for help:

“Now, as Congress prepares to pass an economic stimulus plan, physician practices confront an even greater threat of Medicare cuts in 2022. According to the Congressional Budget Office, final passage of the American Rescue Plan Act of 2021 would set in motion PAYGO statute reductions in Medicare spending of 4% next year, totaling $36 billion. We strongly oppose these arbitrary across-the-board Medicare cuts, and the predictably devastating impact they would have on many already distressed physician practices.

“We urge you to take immediate action to prevent the triggering of Medicare cuts that would result from final passage of the American Rescue Plan Act,” Madara wrote. “We also continue to urge you to pass H.R.315, the “Medicare Sequester Covid Moratorium Act”—bipartisan legislation that would continue the current Medicare sequester moratorium for the duration of the public health emergency.”

Peggy Peck, Editor-in-Chief, BreakingMED™

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