CMS Delays Payments

UPDATED 4/16/2021:

  • The Public Health Emergency is Extended. Read more here

  • Sequestration moratorium extended through end of 2021.


It’s 2021 and unfortunately the hits may keep coming but hopefully not for long. For now, the “hits” are up in the air, but CMS is on our side with the understanding that the last twelve months have been hard, and the impact isn’t over. Congress is currently evaluating whether or not to continue to hold off on sequestration. The ever-unpopular 2% cuts were delayed during the Public Health Emergency (PHE) and set to expire on April Fool’s Day, no kidding.

With April 1 having come and gone, it left many wondering, what about our 2%? Well, at the eleventh hour or more accurately the day before it was to be effective CMS took a step on behalf of all providers. They instructed all Medicare Administrative Contractors (MACs) to hold payment for all claims with dates of service after April 1 until a determination is made by Congress on whether or not sequestration will be extended.

The reasoning, understandably, is to reduce the number of claims which will require reprocessing if the extension is passed. Which is fantastic for practices that want to hold on to every piece of revenue possible, so y’know, all of them. Notably, if the extension is not passed, then the 2% sequestration will return retroactively to April 1, 2021. Don’t take our word for it, check out the recent MLN from CMS explaining just that.

Things to keep in mind, this will definitely impact your cash flow if you see Medicare patients. Prepare in advance because the dip in revenue will be noticeable and you want to ensure services and payroll are not interrupted. Here are a few ways to prepare:

  1. Evaluate your Medicare claims data and identify:

  2. Time from date of service to payment

  3. % they represent of overall revenue

  4. Projected receipts for services rendered between 4/1-4/13 (4/13 is the date the house returns to vote)

  5. Review your cash flows and emergency funds

  6. Assess costs and determine what you need to supplement with until claims are processed

It’s a bit of a challenge but nothing compared to the entirety of changes we’ve gone through during the PHE. The key is preparation. In the meantime, best of luck, keep moving forward, and call if you need me.

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