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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