Congress recently stepped in to prevent a 2% cut across the board in Medicare reimbursement rates for psychologists and all other health care providers. The cut had been triggered by an automatic budget enforcement mechanism to reduce (or “sequester”) federal spending. The 2% Medicare sequestration reduction in provider reimbursements briefly took effect starting March 31, but the Centers for Medicare and Medicaid Services will reprocess any claims for services provided on or after April 1 to restore payments, and the 2% reduction will be suspended through the rest of 2021. President Biden signed legislation postponing the sequestration cuts into law on April 14. APA and other provider organizations wrote to congressional leaders in February asking that the Medicare payment reductions be postponed.

As a result, both the 2% sequestration cuts and a larger across-the-board Medicare reimbursement cut associated with the implementation of new evaluation and management codes will occur beginning in 2022. 

APA is joining a coalition of other health care provider organizations from across the health care spectrum in writing to House Speaker Nancy Pelosi (D-Calif.), House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Charles Schumer (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.), to request the inclusion of $3 billion in funding to prevent this funding cliff from occurring, as part of legislation considered this year to invest in the nation’s health care infrastructure. The letter noted the importance of providing stability for health care providers and the nation’s health care system as we continue dealing with the effects of the COVID-19 pandemic, and in the wake of major disruptions in access to care affecting both patients and providers. 

APA is prioritizing work in this area and will continue advocating for Congress to take action later in the year to avoid these damaging Medicare reimbursement cuts. Grassroots engagement will be necessary in the coming months. 

For more information, contact Scott Barstow.