CMS Suspends Claims Process While Congress Ponders Sequestration

The U.S. Centers for Medicare & Medicaid Services (CMS) will suspend the processing of Medicare claims dated after April 1 while Congress continues to mull whether it will extend the temporary moratorium on payment sequestration implemented due to COVID-19. This applies to all Medicare-certified health care providers, including hospices.

The U.S. House of Representatives and the Senate have each passed separate bills to extend the moratorium through Dec. 31, but neither bill has been considered by both chambers. The Senate bill must now go to the House, which is in recess until April 13. The moratorium, implemented last year through the CARES Act, expired on March 31.

“In anticipation of possible Congressional action to extend the 2% sequester reduction suspension, we instructed the Medicare Administrative Contractors (MACs) to hold all claims with dates of service on or after April 1, 2021, for a short period without affecting providers’ cash flow,” CMS indicated in a statement. “This will minimize the volume of claims the MACs must reprocess if Congress extends the suspension; the MACs will automatically reprocess any claims paid with the reduction applied if necessary.”


Sequestration was established in 2014 by the Budget Control Act. The practice reduced payments to hospice and other health care providers by 2% across the board.

Under current law, hospice providers must return payments to CMS if the total paid exceeds the Medicare payment cap allowance. CMS includes the sequestered 2% as part of the total, even though hospices do not receive those funds.

The House is expected to approve the Senate bill when it returns from recess.


“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 Senate 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.”