Medicare sequestration pushed to end of 2021

April 15, 2021
Keith A. Reynolds

President Biden signed legislation extending the moratorium on a 2 percent Medicare cut.

Medicare sequestration cuts scheduled to take effect April 1, have been pushed off to the end of the year.

President Joe R. Biden signed the legislation April 14, but the Centers for Medicare & Medicaid Services (CMS) had already held claims with service dates on or after April 1 in anticipation of the congressional move.

The move follows outcry from healthcare organizations who said the cuts would harm an industry already battered by the COVID-19 pandemic.

In October, the heads of four healthcare organizations called on congressional leaders to extend the current moratorium on Medicare sequester cuts until after the COVID-19 coronavirus public health emergency has ended.

The letter said that healthcare facilities and staff have already been hard hit by the pandemic and have incurred significant expense to treat the sick while experience unprecedented losses due to the decrease in inpatient and outpatient services.

After the bill passed the House of Representatives, Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), applauded the move in an emailed statement.

“MGMA has long opposed the sequester cuts, a tax that penalizes medical practices for Congress’ inability to meaningfully address the country’s budgetary affairs,” he says. “To reinstate the Medicare sequester in the middle of a global pandemic would threaten the viability of physician practices and adversely impact the patients they treat. We now urge Congress to work in a bipartisan manner to expeditiously pass legislation that would prevent an additional 4% Medicare spending cut next year due to the budgetary effects of the American Rescue Plan.”

In a separate statement, Rick Pollack, president and CEO of the American Hospital Association (AHA), thanked congressional leaders for passing the legislation.

“Even though our country is making great progress by vaccinating millions of people a day, it is clear that this pandemic is far from over and that there is an urgent need to keep hospitals, health systems and our heroic caregivers strong.”