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House Passes Extension of Medicare Sequester Moratorium Through 2021

For CEOs, CFOs, government relations staff

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On April 13, the House of Representatives passed legislation extending the moratorium on the Medicare sequester until the end of 2021. The sequester is a 2% reduction to all Medicare payments. The cuts were scheduled to take effect on April 1 after the moratorium initially passed in the Coronavirus Aid, Relief, and Economic Security Act and was later extended by the Consolidated Appropriations Act (CAA) of 2021, which expired on March 31.

The cost of extending the sequester moratorium is paid for by increasing the 2030 sequestration cuts. The legislation has already been passed by the Senate. President Biden is expected to sign the bill into law soon. In anticipation that the House would pass the Senate extension of the sequester moratorium, the Centers for Medicare & Medicaid Services instructed the Medicare administrative contractors (MACs) to hold claims for dates of service on or after April 1, 2021. Once President Biden signs the legislation, the MACs will process any held claims at the appropriate payment rate.  

The legislation also includes a technical fix to changes in payments to rural health clinics (RHCs) included in the CAA. The CAA set the payment rate for RHCs — including those that are provider-based — certified after Dec. 31, 2019, at $100 per visit, effective for dates of service on and after April 1, 2021.  

In future years the payment rate is trended forward using the Medical Economic Index. The recently passed legislation changes the certification date to Dec. 31, 2020, for provider-based RHCs at a hospital with fewer than 50 beds. It also clarifies that provider-based RHCs at hospitals with fewer than 50 beds that have submitted an application for Medicare enrollment by Dec. 31, 2020, would also be grandfathered.