Congress Prolongs Medicare Sequestration Moratorium for Hospices, Other Providers

The U.S. House of Representatives has approved legislation that extends the moratorium on Medicare sequestration through Dec. 31. The Senate passed the bill and late March, but House approval was delayed because that chamber was in recess. The bill now goes to President Biden, who is expected to sign it into law.

The original moratorium expired March 31, prompting CMS to halt claims processing temporarily until they received direction from Congress on sequestration. The claims process will almost certainly resume shortly after the bill receives Biden’s signature.

“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, in a statement. “This financial certainty is desperately needed in these uncertain times.”


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.

Last year, Congress temporarily suspended sequestration via the CARES Act, providing hospices with much-needed relief. The pandemic has been hurting hospices financially since it began. Nearly 60% of respondents to a National Association for Home Care & Hospice survey said they expected their annual revenues to take a significant hit due to the coronavirus outbreak.


Providers have contended with declines in hospice patient admissions and referrals amid the public health emergency, as well as increased paid leave and paid time off for staff and skyrocketing costs for personal protective equipment and supplies.

 “In the midst of the pandemic, hospice providers have stepped up to address needs in their communities,” said National Hospice & Palliative Care Organization President and CEO Edo Banach. “We are thankful to Congress for passing this important legislation that will ensure hospices can continue to provide uninterrupted, high quality care to patients and families.”

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