Last night the Senate voted in a bipartisan effort to pass legislation preventing a dramatic cut in Medicare funding. The health care industry was facing a potential fiscal cliff, with three funding cuts scheduled to take place in succession, which would have dramatically reduced providers’ financial stability. At the end of the year, the 2% Medicare sequester cut moratorium and 3.75% Medicare Physician Fee Schedule (PFS) Conversion Factor were set to expire; the 4% statutory Pay-As-You-Go (PAYGO) sequester was also scheduled to go into effect. The House voted earlier this week and approved legislation to extend funding and phase in the Medicare sequester. The Senate followed suit, and President Biden is expected to sign the bill. Keep reading to learn more about what this legislation means for the financial viability of providers and the origins of these cuts.
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