Sequestration suspended again

Medicare payment adjustment suspended through March 31, 2021

A small, temporary reimbursement boost for home health providers will continue through March 31, 2021, due to a bill signed into law on Sunday.

The pay boost is actually a suspension of a punitive 2 percent Medicare payment adjustment known as "sequestration," which has been effective since 2011, according to J'non Griffin, President of Home Health Solutions, a Simione Coding Company.

The newly-passed Consolidated Appropriations Act of 2021, a major government funding bill signed into law over the weekend, extends a suspension of the payment adjustment which has been in place for claims filed since May due to the Covid-19 public health emergency.

The Act includes numerous Covid-19 measures and economic stimulus provisions, and is being described as the fifth longest piece of legislation to be passed by U.S. Congress in the history of our country. One of those provisions extends the suspension of a 2 percent payment adjustment normally applied to all Medicare Fee-for-Service (FFS) claims.

The payment adjustment was first suspended under the Coronavirus Aid, relief and Economic Security (CARES) Act passed last spring. But the CARES Act suspension only applied to FFS claims from May 1 through Dec. 31. The Consolidated Appropriations Act of 2021, which was signed into law on Sunday, Dec. 27, continues the suspension for another three months, covering claims through March 31, 2021.

"This continues the slight boost in pay that home health providers have been receiving since the CARES Act temporarily did away with the 2 percent sequestration," Griffin said. "That 2 percent adjustment is significant to agencies struggling financially under the Covid-19 pandemic and looking ahead with some trepidation to new revenue challenges in 2021," Griffin said. "The news that the suspension has been extended until March is being met with relief and appreciation."

Medicare sequestration is a penalty created under the Budget Control Act of 2011 forcing providers to reduce the cost of services by 2 percent.

Without Congressional intervention such as the suspensions granted by the CARES Act and the Consolidated Appropriations Act, the 2 percent penalty will remain in effect through 2022. Complimentary webinar Jan. 7 Worried about your agency's revenue cycle in 2021? Be sure to sign up for a complimentary webinar from Simione Healthcare Consultants. "Revenue Cycle Shake-up: Key Strategies to Quiet the Aftershock of RAP and PDGM Changes" will be presented on Jan. 7, from 3-4 p.m. Eastern time. Click here to register now.