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CMS Delays 2% Medicare Sequester Cuts Through 2021

CMS announced that the 2% Medicare sequester cuts will last through December 31, 2021

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April 19, 2021 – The Biden Administration’s Coronavirus Aid, Relief, and Economic Security (CARES) Act created a suspension of the 2% sequestration payment adjustment applied to all Medicare Fee-for-Service (FFS) claims. The Medicare sequester cut was paused at the start of the pandemic to support healthcare providers struggling with depressed patient volumes and revenues.

The Medicare reimbursement cut on FFS claims was originally suspended from May 1 through December 31, 2020. This was later extended through March 31, 2021, by the Consolidated Appropriations Act.

Medicare Sequester Cut Extended by New Law

The Centers for Medicare & Medicaid Services (CMS) announced that that the 2% Medicare reimbursement cut is suspended through the remainder of 2021. According to Senators Shaheen and Collins, this will prevent approximately $12.3 billion in Medicare reimbursement cuts through the remainder of 2021.

On April 15th, President Joe Biden signed an Act to Prevent Across-the-Board Direct Spending Cuts, and for Other Purposes.  This law extends the suspension period through the end of 2021 due to the COVID-19 pandemic. The bill started in the Senate. It was passed by a 90 to 2 vote. In the House of Representatives, the bill was passed in a 384 to 38 vote. It was then sent to President Biden’s desk for approval.

The extension is being celebrated by providers. Groups like the American Medical Association (AMA), Federation of American Hospitals (FAH), American College of Physicians (ACP), and America’s Health Insurance Plans (AHIP) all supported extending the Medicare sequester cut.

Susan R. Bailey, MD, President of the American Medical Association said, “The Senate and House, Democrats and Republicans, have overwhelmingly acknowledged that cutting Medicare payments during a pandemic is ill-conceived policy. Physician practices are already distressed, and arbitrary 2 percent across-the-board Medicare cuts would have been devastating.”

Medicare Claims Processing to Resume

While Congress debated the bill to extend the 2% Medicare sequester cut, CMS paused the processing of Medicare claims. Claims with dates of service on or after April 1, 2021, were put on hold. This was to avoid making reduced payments to providers that would need to be reprocessed later.

 

With the passing of the bill, CMS directed Medicare contractors to release claims held in April. They also instructed contractors to reprocess claims reduced by the Medicare sequester cut.  No actions need to be taken by providers.

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The VBP Blog is a comprehensive resource for all things related to value-based payments. Up-to-date news, informative webinars, and relevant blogs in the VBP sphere to help your organization find success.