Biden Administration Extends Suspension of Mandatory 2% Medicare FFS Payment Sequestration

President Biden recently signed the Act to Prevent Across-the-Board Direct Spending Cuts, and for Other Purposes (the “Act”) (available here) into law. The Act extends the temporary suspension of certain mandatory Medicare FFS claim payment reductions until December 31, 2021.

By way of background, the Budget Control Act of 2011 required mandatory across-the-board reductions to be made in federal spending, otherwise referred to as “sequestration.” President Obama issued a Sequestration Order in March 2013. The Order required that budgetary resources in non-exempt budget accounts be reduced by the amount calculated by the Office of Management and Budget. In response, the Centers for Medicare & Medicaid Services (“CMS”) issued guidance that Medicare fee-for-service (“FFS”) claims with dates of service after April 1, 2013 would incur a 2% reduction in Medicare payment. CMS further clarified that claims for durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) would be reduced by 2% if the date of service or the start date for any rental/multi-use supplies is on or after April 1, 2013.

In response to the COVID-19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in March 2020. The CARES Act was a stimulus bill created to aid businesses, practitioners, and others negatively impacted by the COVID-19 pandemic. Amongst other things, the CARES Act temporarily suspended sequestration of Medicare FFS claims from May 1, 2020 through December 31, 2020. Subsequently, the Consolidated Appropriations Act of 2021 extended the suspension period further until March 31, 2021.

The Act has extended the temporary sequestration suspension even further, to December 31, 2021. Consequently, CMS will not reduce Medicare FFS payments by 2% until the suspension period has ended, unless the period is extended further.

For any questions regarding Medicare FFS payment sequestration, please contact Adrienne Dresevic, Esq. at, or your regular HLP attorney, or, or call (248) 996-8510 or (212) 734-0128.

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