Relief From the -2% Medicare Sequestration Reduction Is Restored
n response to the COVID-19 pandemic, Congress has now acted three times to pause the -2% reduction to the reimbursement that a participating provider would receive directly from Medicare. The first time was a 9-month reprieve granted in March 2020. Then, when it was clear that the economic impact of the pandemic was ongoing, that policy was renewed in December 2020 with an expiration date of April 1, 2021.
For the first few months of this 117th Congress, PPS and other stakeholders focused advocacy efforts on the bipartisan Medicare Sequester COVID Moratorium Act (H.R.315/S.748) which was seeking to delay reinstatement of the automatic Medicare sequester for the duration of the public health emergency (PHE). The PHE is currently set to expire on April 21, 2021, but the Biden Administration has stated that it plans to extend the PHE (which, unless extended, automatically expires after 90 days) repeatedly for the rest of 2021.
For the past month Congress has been working on passing legislation to delay reinstatement of the policy to automatically remove (or "sequester") a portion of Medicare reimbursements. Instead of tying this expensive policy change to a fluid end-date that would be decided by the Executive Branch, lawmakers chose to again specify an expiration date—December 31, 2021. This approach is not surprising as it is common for federal spending policies to have expiration dates. Furthermore, because of the Administration’s projection that PHE will be in place for the rest of the year, the expiration of the Medicare sequester moratorium and the termination of the PHE will likely coincide with one another.
Unfortunately, the chambers did not pass identical legislation to implement relief from the sequester until April 13. As a result, protection from the -2% reduction officially expired on March 31. However, in line with precedent, on March 30, the Centers for Medicare and Medicaid Services (CMS) released a statement “In anticipation of possible Congressional action to extend the 2% sequester reduction suspension, we instructed the Medicare Administrative Contractors (MACs) to hold all claims with dates of service on or after April 1, 2021, for a short period without affecting providers’ cash flow…the MACs will automatically reprocess any claims paid with the reduction applied if necessary.”
Now that the reprieve from the -2% reduction of Medicare reimbursement has been restored, effective April 14 by the enactment of this law, CMS will process the claims it has been holding.
Thank you again for joining our successful advocacy efforts. Members of Congress heard the chorus of voices asking for Members of Congress to extend the relief at a time when many of you are still experiencing economic impacts from the pandemic.