Medicare Sequester Moratorium Is Officially Extended

April 15, 2021

Yesterday, President Biden signed legislation extending the moratorium on Medicare sequestration. This occurred after the House passed the Medicare Sequester Relief Act late Tuesday, which extended mandated 2% Medicare cuts to healthcare providers until the end of the year. 

In March of 2020, Congress temporarily halted the 2% Medicare cuts until the end of last year as part of the Coronavirus Aid Relief and Economic Security (CARES) Act. On December 27, 2020, The Consolidated Appropriations Act of 2021 was enacted, giving providers a three-month extension (until March 31, 2021) of the Medicare sequester moratorium originally included in the CARES Act. In their letter on March 18, SNMMI and the undersigned organizations noted and commended these previous actions taken to assist physicians, clinicians, technologists, and hospitals during the COVID-19 pandemic. Additionally, they urged the 117th Congress to act quickly to extend the Medicare sequester moratorium through the end of the year. A few days before the cuts were to take effect again, the Senate voted overwhelmingly in favor of the extension.

We are thankful for this much-needed legislation as health care providers continue to face significant financial hardships, with 97 percent of physician practices experiencing a negative financial impact directly or indirectly related to COVID-19. Practices have reported a 55 percent decrease in revenue and a 60 percent decrease in patient volume since the beginning of the pandemic.1 New analyses predict another potential $53-$122 billion in lost hospital revenue in 2021.2 The revenue that has been lost affects not only the facility or practice but also the non-physician personnel who work to provide patient care during this ongoing pandemic. The sequester moratorium extension will help ease these financial shortfalls. 

1. Medical Group Management Association, COVID-19 Financial Impact on Medical Practices, April 13, 2020, https://www.mgma.com/resources/government-programs/covid-19-financial-impact-on-medical-practices.
2. COVID-19 in 2021: The Potential Effect on Hospital Revenues, February 2021, https://www.aha.org/system/files/media/file/2021/02/KH-2021-COVID-Impact-Report_FINAL.pdf.