Sequestration Returns

Sequestration is Making a Comeback

There has been a nice break from Medicare sequestration due to the PHE. However, starting April 1, 2022, sequestration is coming back.

As a reminder, sequestration means that Medicare withholds a percentage of the payments due to healthcare providers such as skilled nursing facilities, home health agencies, hospices, and hospitals. This 2% adjustment had been in effect from April 1, 2013 through April 30, 2020, when it was temporarily suspended for the COVID-19 PHE by the CARES Act. Now CMS is reinstating it.

For the period of April 1, 2022 through June 30, 2022, sequestration will be 1% of both claims-based (PS&R) and non-claims based amounts. Beginning July 1, 2022, the full 2% will once again be withheld.

Your CMS-approved Medicare cost report software will, of course, calculate these amounts or pull them in from the PS&R per CMS regulations. Your knowledgeable cost report preparer can take care of this for you and save you the headache.

It is worthwhile to note that there are various rounding formulas in place which are used when calculating the sequestration percentages, so if you are trying to calculate yourself, you may end up with a differenet number than the cost report software. The cost report software follows CMS guidelines for calculation, which will match the calculations the MACs are making to determine reimbursement. For more information or to receive a file on how this is calculated, feel free to contact us.

Need help preparing your cost report?  At PPS we have over thirty years of cost reporting experience and are happy to share our expertise with you!  Contact us now for cost reporting assistance.

For information or assistance, we are, as always, here to help! Contact Us via emailwebsite, or call 800-447-2540/ 248-968-4100 for our renowned customer service.

Disclaimer:  This blog does not contain legal advice. What it does contain are our best
explanations, advice, and suggestions to help facilities and cost report preparers to understand the cost report forms and reporting process and offer suggestions for their preparation. Progressive Provider Services assumes no legal responsibility for the content of this blog, nor for cost reports or other reports prepared based on the content herein.

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