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CMS Resumes 2% Sequestration Adjustments

Shasta McClary

December 15, 2020

Section 3709 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily suspended the 2% payment adjustment applied to all Medicare Fee-For-Service (FFS) claims due to sequestration. The suspension was effective for claims with dates of service from May 1 through December 31, 2020.

Effective January 1, 2021, the temporary suspension will expire. Medicare Fiscal Intermediaries (FI’s) will resume withholding the 2% sequestration on Fee-For-Service (FFS) claims. Managed Care plans that follow CMS guidelines for reimbursement will also resume withholdings.

This change is in addition to the 2021 Medicare Premiums, Deductibles, and Co-Insurance updates. See our last client alert with more details.

Providers should be sure to update their billing software or reach out to their software EDI departments to ensure systems are updated with this change.

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