Senate Passes Bill to Extend Medicare Sequester Moratorium

WASHINGTON, D.C. (March 26, 2021)—The Senate has passed by 90-2 vote a long-awaited bill that, among other health care provisions, would eliminate the 2% across-the-board cut to all Medicare payments, known as sequestration, until the end of 2021. To pay for the change, the bill would increase the fiscal year 2030 sequester cuts.

The Coronavirus Aid, Relief, and Economic Security Act initially put the cuts on pause as providers grappled with the pandemic’s early days. The cuts are expected to resume April 1 without additional congressional action. The House passed different legislation last week that would extend the moratorium through the end of 2021, and includes a provision to eschew budget rules that would have imposed additional cuts on Medicare payments to providers.

The House is expected to take up the Senate-passed bill the week of April 13 when it returns to Washington D.C. It is expected that the Centers for Medicare & Medicaid Services will hold the Medicare claims until the bill is signed into law as it has done in the past.

The bill also would make several technical changes to the rural health clinic (RHC) provisions that were included in the Consolidated Appropriations Act (CAA), 2021. Specifically, the CAA required that the payment rate for RHCs, including provider-based RHCs certified after Dec. 31, 2019, be capped at $100 per visit beginning April 1, 2021. This rate will increase over time based on the Medicare Economic Index, but will remain well below typical provider-based RHC rates. The bill would correct the Dec. 31, 2019, date to Dec. 31, 2020, and include both Medicare-enrolled RHCs located in a hospital with less than 50 beds and RHCs that have submitted an application for Medicare enrollment as of this date.

“At a time when our country is relying so heavily on our health care providers to help get us back to normal, we cannot ignore the financial realities they face,” said Sen. Susan Collins (R-Maine), a sponsor of the bill. “I am pleased that the Senate passed this legislation [Sen. Jeanne Shaheen (D-N.H.)] and I authored that will extend the current sequester moratorium until the end of the year. This financial certainty is desperately needed in these uncertain times.”

Industry groups have been pushing for the legislation and celebrated its passage.

“NAHC appreciates the Congress’s continued attention to the needs of homecare and hospice patients and providers through continued suspension of the Medicare sequester,” said the National Association for Home Care. & Hospice in a statement. “This added financial flexibility has proven to be a lifeline for home health and hospice providers as they continue to face consequences brought on by the COVID-19 public health emergency. Suspending  the 2% reimbursement reduction enables providers across the county to continue their care delivery, ensuring access to the most vulnerable populations in the safest and most preferred location, their own home.”

“We appreciate the efforts of Senators Jeanne Shaheen and Susan Collins to get the Senate to take swift and decisive action continue the pause on the 2% Medicare sequester cuts. HME grassroots advocates played a significant role in making sure Congress understood the urgent need for action on this issue,” Tom Ryan, president and CEO of AAHomecare. “Once the House finalizes the measure, the HME community needs to start pressing for a waiver of potential 4% Medicare cuts for 2022 related to “pay-as-you-go” legislation from a decade ago that could be applied to the most recent round of COVID-19 relief. Surely, it is not Congress’ intent to finance expansive coronavirus relief through deep cuts on future Medicare reimbursement rates.”