Updated on 12/16/2021

Author: Michael Tidd LVN, HCS-D, COS-C

Sequestration 2% claim reduction is being phased back in​ over the next 6 months.  Sequestration is a payment reduction that was imposed Congress in 2013 because the Democrats and Republicans could not reach an agreement on how to lower the deficit.  It is a mandate put into the 2011 Budget Control Act.  The 2% reduction was put on hold in 2020 as a result of the public health emergency and the impact the COVID-19 Pandemic had on the economy.  As the country economic situation is improving, this 2% reduction is being phased back in and will once again reduce 30 day claim payments for all Medicare Fee-for-service claims.​  The phase in schedule is listed below.

  • No payment adjustment through March 31, 2022
  • 1% payment adjustment April 1 – June 30, 2022
  • 2% payment adjustment beginning July 1, 2022

​This means that your agency will see the full 2.6% increase provided by the 2022 home health payment rule for all claims through March 31, 2022.  Starting April 1 through June 30, claims will be reduced by 1%, and then the on claims starting July 1, 2022 the full impact of the sequestration will resume in full effect.  The result is that agencies will only see a 0.6% increase in claims provided by the 2022 final payment rule.


Based on an article published by CMS on December 16, 2021
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