Congress has passed the Protecting Medicare and American Farmers from Sequester Cuts Act, delaying anticipated cuts to Medicare reimbursement initially expected for 2022.  The bill is expected to be signed into law by the President shortly.

The act eases several industry concerns which, if not addressed, could have resulted in reductions of 10% or more for certain specialties. As an example for one specialty, Radiology, the RBMA estimates that the net impact of these changes will be approximately -3% for Diagnostic Radiology.

Specifically, the act will:

  • Temporarily increase the Medicare Fee Schedule Conversion Factor (CF) by +3% for 2022.
    • The final CF accounted for the expiration of an earlier temporary increase of +3.75% passed by the Consolidated Appropriations Act of 2021.
    • This provision lessens the overall reduction of the CF from 2021 to 2022 to -.7% instead of -3.7%.
  • Delays -2% Medicare Sequester cut until March 31st, 2022 and reduces cut for remainder of year.
    • Since 2013, Medicare has been subject to an automatic annual “sequestration” cut of 2% as required by the Budget Control Act of 2011 which has been temporarily suspended during the COVID-19 PHE.
    • Medicare will not apply the sequester cut until April 1st, 2022 when Medicare will impose a -1% sequester reduction until July 1st, 2022.  The full -2% sequester will be in effect afterwards.
  • Delays – 4% “PAYGO” cut until 2023.
    • The passage of the American Rescue Plan Act triggered a statutory Pay-As-You-Go (PAYGO) budget control measure that offsets an increase to the federal deficit by automatically reducing federal spending, initially set to begin in 2022.
  • Delay of the Radiation Oncology Payment Model (RO Model) until 2023.
    • The RO Model is a mandatory Alternative Payment Model specific to Radiation Therapy services for Medicare beneficiaries. The model incorporates episode-based payments for courses of care instead of fee-for-service reimbursement, a portion of which is withheld and then earned back as administrative requirements are completed.

As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.

Kayley Jaquet

Manager, Regulatory Affairs