Biden Signs Bill Extending the Suspension of 2% Medicare Sequestration CutsĀ 

Situation Report | April 19, 2021

In a major development for home health agencies and hospices, Congress has passed, and President Biden has signed, a bill extending the suspension of 2 percent Medicare sequestration cuts through the end of the year.

It is estimated that this bipartisan action avoids a payment reduction valued at $270 million to home health agencies and $300 million to hospices nationally, according to the National Association for Home Care and Hospice (NAHC).

Sequestration cuts had been on pause since the CARES Act was signed in 2020; but the cuts were set to resume on April 1, 2021.

In late March, the U.S. Senate and House of Representatives passed measures to extend the Sequestration pause, yet the bills differed, requiring the House to pass the Senate’s version of the bill, which it did last week, followed promptly by the President’s signature.

The consensus measure was signed into law almost two weeks after the April 1 deadline. As HCA reported in the April 5 Situation Report, Medicare Administrative Contractors (MACs) anticipated this lag time and, therefore, announced that they were putting a temporary hold on claims for a brief period as they awaited an outcome on the continuation of the Sequestration pause. This was done to avoid having to later reconcile claims.

Now that the continued pause is signed into law, the MACs announced they will release any previously held claims with dates of service on or after April 1. They will also reprocess any claims that may have had a Sequestration reduction applied. Providers do not need to take any action.