Awaiting Final Status of Sequestration Pause, CMS Contractors Instructed to Put Temporary Hold on Claims 

Situation Report | April 5, 2021

In last week’s Situation Report we reported on federal legislation to extend the suspension of 2 percent Medicare sequestration cuts.  

But the status of sequestration is still unresolved, which is why the U.S. Centers for Medicare and Medicaid Services (CMS) last week instructed its Medicare Administrative Contractors (MACs) to temporarily hold claims with dates of service on or after April 1, 2021 as it awaits further Congressional action on the suspension of sequestration cuts. 

The hold on claims has to do with timing. Last year’s CARES Act suspended the sequestration cuts only until April 1. Even though the Senate and House recently passed legislation to continue this suspension beyond April 1, each house passed a different bill, which means the House now must pass the Senate’s version of the bill, and it has yet to do so before the April 1 deadline last week. 

That final Congressional action is not expected to happen until the week of April 13, prompting CMS last week to implement a hold to “minimize the volume of claims the MACs must reprocess if Congress extends the suspension,” CMS says. “The MACs will automatically reprocess any claims paid with the reduction applied if necessary.”   

CMS did not explain how long it will hold claims but said that the action would last “for a short period without affecting providers’ cash flow.” 

HCA will report back to members with further information as we learn more.