Medicare sequester cuts have been extended by another year

Pension proposal marks second extension of payment reduction

Congress this week passed a bill that would extend Medicare payment reductions under sequestration by one year to offset the cost of reversing reductions in pension benefits for veterans.

The Senate on Wednesday voted 95-3 to reverse the cut to pension benefits for veterans up until age 62, one day after the House passed it in a 326-90 vote. President Obama is expected to sign the bill into law.

Legislation marks second sequester extension

According to Modern Healthcare, several medical organizations tried to block the latest extension of Medicare cuts.

Originally, the across-the-board Medicare reductions imposed by the Budget Control Act of 2011 were slated to end after 2021. However, lawmakers agreed during last month's budget negotiations to continue the reductions for an additional two years, until 2023. The latest vote pushes the end of Medicare sequestration to 2024.

Lawmakers reach budget deal that extends Medicare's sequester cuts

Hospitals are paying close attention to the troubling pattern, which they warn could have a detrimental effect on Medicare beneficiaries. Hospital officials argue that the cuts, which come alongside other funding reductions under the Affordable Care Act (ACA), will be too much to absorb without shifting the costs to staff and patients.

Recently, nine organizations—including the American Medical Association and the Federation of American Hospitals—sent a letter to senators stating that "Medicare is meant to assure seniors access to needed medical care, not serve as a piggybank for other programs." The letter added, "It is bad policy to further extend Medicare sequester cuts that could undermine care for seniors" (Demko, Modern Healthcare, 2/12 [subscription required]).


Next in the Daily Briefing

Health care workers may be the nation's most stressed employees

Read now