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AAMC Joins Health Care Groups on Relief from Medicare Sequester and PAYGO

March 12, 2021

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Allyson Perleoni, Manager, Government Relations
Len Marquez, Senior Director, Government Relations

The AAMC joined hospitals and health care groups in a March 12 letter to congressional leadership, urging them to extend the Medicare sequester moratorium and provide relief from impending statutory Pay-As-You-Go (PAYGO) cuts by April 1.

The letter urges Congress to pass legislation before April 1 to extend the 2% Medicare sequester moratorium as well as prevent the projected 4% Medicare spending cut (approx. $36 billion) scheduled to begin next year due to Pay-As-You-Go (PAYGO) statute reductions.

The letter emphasizes the importance of not subjecting providers to billions of dollars of cuts and reminds congressional leaders that, despite fewer COVID-19 cases and increased access to vaccinations “the months ahead will continue to present obstacles and challenges for both health care providers and the patients they serve.”

The Consolidated Appropriations Act, 2021 (P.L. 116-260) extended the sequester moratorium until March 31, but additional legislative action is needed to continue the moratorium going forward [see Washington Highlights, Dec. 23, 2020]. The AAMC has supported legislative efforts to extend the Medicare sequester, including by supporting the Medicare Sequester COVID Moratorium Act (H.R. 315) and joining other health care groups to urge congress to continue the moratorium [see Washington Highlights, Feb. 18].

The PAYGO Act of 2010 (P.L. 111-139) dictates that, when the reconciliation process is used without budget offsets, automatic sequestration must be enacted to reduce spending the next year. The Congressional Budget Office estimated that because of the recently signed American Rescue Plan Act of 2021, approximately $381 billion in cuts must occur in Fiscal Year 2022 – with $36 billion (or 4% of Medicare spending) of those coming from the Medicare program. Congressional intervention is needed to eliminate the cuts.

“Before April 1, Congress has the opportunity to both extend the 2% Medicare sequester moratorium and prevent a severe PAYGO reduction in Medicare spending. We urge Congress to act now by passing legislation that will eliminate these looming Medicare cuts and help us ensure we have what we need to overcome the COVID-19 pandemic,” the letter concludes.

Rep. John Yarmuth (D-Ky.) led the introduction of H.R. 1868 on March 11, which extends the Medicare sequester moratorium until Dec. 31, 2021, and also prevents PAYGO cuts related to the American Rescue Plan Act from taking effect. The House Rules Committee will consider the legislation on March 16, and the bill will likely be voted on by the full House by the end of the week.

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