Medicare Sequester Extended Two Years

The Bipartisan Budget Act of 2019, signed into law last week by President Donald J. Trump, includes an extension of the Medicare sequestration cuts for an additional two years. This across the board cut of two percent applies to all Medicare provider payments.

The Bipartisan Budget Act of 2019 will increase federal spending by $320 billion over the next two years compared to existing law, and the debt ceiling – the cap on how much money the federal government may borrow — has been suspended through July 2021.

The extension of the Medicare sequestration cuts was originally created in the Budget Control Act of 2011 and set to go into effect in 2013 should a bipartisan Joint Select Committee on Deficit Reduction not succeed in crafting legislation to reduce the deficit by $1.5 trillion between 2012 – 2021. The Joint Committee was not successful, triggering the two percent reduction, which began on April, 2012.

Congress enacted subsequent legislation extending sequestration, most recently in the Bipartisan Budget Act of 2018 to a 2027 termination date, followed by this year’s Bipartisan Budget Act with a new extension to 2029.

Due to the delayed triggering of sequestration into 2013, and the requirement that the reduction be applied for a full 12 months the effective time period of the reduction carries over to the following year. In this case sequestration has been extended to 2029 but will be in effect until April 2030.

NAHC does not anticipate Congress will end the Medicare sequestration cuts as evidenced any time soon.