Congress Extends 2% Medicare Sequestration Holiday Through End of 2021

Skilled nursing facilities and other health care providers will receive 2% more in Medicare reimbursements through the end of 2021 after President Biden signed a long-awaited sequestration moratorium bill into law Wednesday.

Congress in late March 2020 suspended the 2% sequestration cut as the coronavirus crisis began to gain steam, and late last year bumped the deadline back to March 2021.

The moratorium technically lapsed after the House of Representatives and Senate each passed separate and distinct bills to extend the break before the lawmakers recessed for the Easter and Passover holiday; Medicare Administrative Contractors (MACs) temporarily held processing of payments starting April 1 until Congress could reconvene and pass a unified bill.


That bill turned out to be H.R. 1868, which cleared the Senate with a 90-2 vote and the House by a margin of 384-38.

The across-the-board 2% Medicare sequestration cut has been in effect since 2013, after Congress looked to cap overall health care spending in the wake of the Great Recession.

The news came about a week after the Centers for Medicare & Medicaid Services (CMS) proposed a smaller-than-anticipated 1.3% Medicare reimbursement increase for skilled nursing facilities in fiscal 2022, while also raising the specter of potential downward adjustments to the Patient-Driven Payment Model (PDPM) — which the federal government has determined increased overall Medicare spending on nursing homes by $1.7 billion, or about 5%, in fiscal 2020.