Pathology/Lab Coding Alert

Question: What is the “sequestration payment,” and does it affect what we’re paid by Medicare for laboratory tests?

Alabama Subscriber

Answer: Sequestration refers to an annual 2 percent reduction in Medicare fee for service payments beginning in fiscal year 2013 based on the Budget Control Act of 2011.

Medicare fee for service includes Medicare Part B payments based on the Clinical Laboratory Fee Schedule (CLFS) and the Medicare Physician Fee Schedule (MPFS). Many Medicare Advantage plans aren’t based on fee for service.

Currently, the sequestration pay cut is suspended through Dec. 31, 2021. That means your Medicare pay for laboratory services isn’t currently further reduced by sequestration. But without further Congressional action, the 2 percent cut will resume next year.

Process: The sequestration suspension was originally enacted based on the Coronavirus Aid, Relief and Economic Security (CARES) Act, effective from May 1through Dec. 1, 2020. The Consolidated Appropriations Act, 2021, extended the suspension period to March 31, 2021. An Act to Prevent Across-the-Board Direct Spending Cuts, and for Other Purposes, signed into law on April 14, 2021, extends the suspension period to December 31, 2021, according to MLN Connects, available at www.cms.gov/outreach-and-educationoutreachffsprovpartprogprovider-partnership-email-archive/2021-04-16-mlnc#_Toc69394754