2% Medicare Sequester Cuts Delayed Through End of 2021

A two percent cut to Medicare reimbursement will be paused until the end of the year, CMS recently announced.

The announcement via the MLN Connects newsletter on April 16th stated that the Medicare sequestration will not be applied to Medicare fee-for-service claims through Dec. 31, 2021, per a new federal law.

The law signed by President Joe Biden on April 15th extended the pause on the Medicare reimbursement cut because of the ongoing COVID-19 pandemic. The moratorium on Medicare sequestration was originally slated to expire on April 1st per previous COVID-19 legislation.

The latest law was passed by the House of Representatives in a 384 to 38 vote in favor of the bill, which had already passed 90 to 2 in the Senate.

The law also contained other healthcare measures, including technical corrections related to rural health clinics and disproportionate share hospitals.

CMS had held off processing Medicare claims in April while Congress debated and voted on the legislation to avoid making reduced payments to providers.

The agency has now directed Medicare contractors to release any claims held in April because of the policy and to reprocess any claims paid with a reduction applied, according to the latest MLN Connects newsletter.

Healthcare providers and facilities participating in Medicare do not need to take any action to receive higher reimbursements or reimbursements that may have been reduced by the Medicare sequestration, CMS highlighted.

Healthcare industry groups have been calling on Congress to extend the moratorium on Medicare sequestration in the months leading up to April 1st.

“The months ahead will be difficult as our nation launches an unprecedented effort to vaccinate the vast majority of Americans, while we simultaneously face the spread of new and potentially more harmful COVID-19 variants. Health care providers across the spectrum are ready to meet this challenge, but we need congressional help now,” leading industry groups wrote to top lawmakers in February.

The groups included the American Medical Association (AMA), Federation of American Hospitals (FAH), American College of Physicians (ACP), and America’s Health Insurance Plans (AHIP).

AMA later stated that ending the suspension on the Medicare reimbursement cut this spring presented “imminent threats” to physician practice viability.

“We strongly oppose these arbitrary across-the-board Medicare cuts, and the predictably devasting impact they would have on many already distressed physician practices,” James L. Madara, MD, CEO and executive vice president of AMA, said in March.

These leading industry groups have applauded Congress for passing legislation extending the suspending of Medicare sequestration.

In a statement shared with the media, AMA president Susan R. Bailey, MD, 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.”

“The AMA appreciates the bipartisan teams of Reps. Brad Schneider (D-IL) and David McKinley (R-WV) as well as Sens. Susan Collins (R-ME) and Jeanne Shaheen (D-NH) for shepherding this bill across the aisles and through their chambers,” Bailey continued.

Additionally, AHA president and CEO Rick Pollack said, “America’s hospitals and health systems thank Speaker Pelosi, Leader McCarthy and the U.S. House of Representatives for joining Majority Leader Schumer, Leader McConnell and the U.S. Senate in extending needed relief from Medicare cuts to doctors and hospitals caring for patients and vaccinating communities.”

Pollack also stated that AHA will continue to work with Congress and the Biden administration to support hospitals during this time through advocacy for more overall Provider Relief Fund money, relief from Medicare accelerated payment repayment, and future legislation offsetting recent Medicare cuts due to PAYGO provisions in the latest COVID-19 relief package.