Practice Management

CMS Places Hold on Claims Ahead of Sequester Vote

·     A moratorium on a two percent reduction in Medicare reimbursements is set to expire April 1.

·     Congress is expected to extend the moratorium when it returns mid-April.

·     CMS held claims in anticipation of Congressional action and will resume processing after the fix is law.

Today, the Centers for Medicare and Medicaid Services (CMS) announced that it will hold Medicare claims in anticipation that Congress will prevent looming payment reductions. A two percent payment reduction is set to go into effect April 1 for payments under the Medicare program, though Congress is expected to pass legislation upon return from its Spring recess to avert the cuts. Due to this expectation, CMS instructed Medicare Administrative Contractors (MAC) to hold and not process submitted claims with dates of service on or after April 1, 2021. The MACs will then process held claims after the extension of the moratorium on the reductions - also known as sequestration - is signed into law.

·     Background. Under the Budget Control Act, automatic sequestrations of both mandatory and discretionary spending were triggered based on Congress's failure to reduce the federal deficit by $1.2 trillion from fiscal years 2012-2021. The sequester of Medicare benefit payments is capped at two percent. However, the Medicare sequester is currently suspended, as the CARES Act and subsequent legislation placed a moratorium on the sequester through March 2021.

Both the House and the Senate have passed versions of legislation to extend the moratorium on the Medicare sequester. The House-passed bill also included a delay of a mandatory four percent payment cut to Medicare payments under the statutory pay-as-you-go (PAYGO) law, which mandates payment cuts if federal spending reaches a certain level. That level was breached by the passage of the American Rescue Plan Act. The four percent reduction is set to take effect in 2022. The Senate-passed bill does not address a fix to cuts under PAYGO. The House is expected to pass the Senate bill upon its return in mid-April, and Congress will look to a separate legislative effort to address fixes to PAYGO-mandated cuts at a later time.