Senate Extends Suspension of 2% Medicare Sequestration

Since 2012, Medicare payments to medical practices have been subject to a -2% sequestration in an effort by Congress to address the debt ceiling crisis. The Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily suspended that sequestration in May of 2020, meaning that physicians have seen a 2% increase in their payments on Medicare claims. The expiration of this suspension – previously extended from December 21, 2020 to March 31, 2021 – has again been extended through the end of 2021. On April 13, 2021, Congress passed legislation approving this extension and President Biden is expected to sign the bill into law soon.

Back at the end of March, the Centers for Medicare & Medicaid Services (CMS) instructed Medicare Administrative Contractors (MACs) to hold claims with dates of service on or after April 1 without affecting the practitioners’ cash flow. They recommended this hold until this legislation was passed to avoid having to reprocess the claims. Now that the legislation is passed, these claims will be processed. The expense of this suspension is expected to be recouped by extending the sequester through the end of the 2030 budget year.

Works Cited
Coronavirus Aid, Relief, and Economic Security Act of 2020, Pub. L. 116-136, §3709, 134 Stat. 421 (2020).
To prevent across-the-board direct spending cuts, and for other purposes., Pub. L. 117-7, §1 (2021).