Congressional Action to Extend Two Percent Medicare Sequester Reduction Suspension

On March 25, 2021, the Senate passed (90-2) legislation that will extend the sequester moratorium through the end of 2021. The expense will be fully offset by extending the sequester into the 2031 budget window. Despite having passed the bill earlier in the month, the House will need to pass it again when it returns in April because of amendments by the Senate.

In anticipation of the passage of this legislation, the Centers for Medicare and Medicaid Services (CMS) has instructed Medicare Administrative Contractors (MACs) to hold all claims with dates of services on or after April 1, 2021, for a short period without affecting providers’ cash flow. This will minimize the volume of claims the MACs must reprocess if Congress extends the suspension; the MACs will automatically reprocess any claims paid with the reduction applied, if necessary.