2% Medicare cuts begin today as a result of sequestration

Starting today April, 1st, 2013, reimbursements for medical services that are provided and procedure that are performed to Medicare patients will be cut by 2% due to the sequester federal budget cuts.

Patients responsibilities will not change as they still have to pay their co-insurance, deductibles or copays. they still have to pay their full patient responsibility.  So, Medicare patients are not getting ta 2% discount on what they owe.  Medicare is reducing their share of the payment by 2%.  To illustrate with an example, if a doctor bills $150.00 for a procedure and the patient is responsible for a $50.00 co-insurance and Medicare is responsible for the remaining $100.00.  The patient is still responsible for the entire co-insurance amount while Medicare will deduct 2% out of its $100.00 responsibility and pay $98.00.

See below the CMS Provider enews that came out on March 8th, 2013 (brought by the Medicare Learning Network)

To All Health Care Professionals, Providers, and Suppliers

Mandatory Payment Reductions in the Medicare Fee for Service (FFS) Program -“Sequestration”

The Budget Control Act of 2011 requires, among other things, mandatory across - the - board reductions in Federal spending, also known as sequestration. The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months. As required by law, President Obama issued a sequestration order on March 1, 2013. The Administration continues to urge Congress to take prompt action to address the current budget uncertainty and the economic hardships imposed by sequestration.

This listserv message is directed at the Medicare FFS program (i.e., Part A and Part B). In general, Medicare FFS claims with dates - of - service or dates - of - discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment. Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date - of - service, or the start date for rental equipment or multi - day supplies, is on or after April 1, 2013.

The claims payment adjustment shall be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction. The Centers for Medicare & Medicaid Services encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare’s reimbursement.

Questions about reimbursement should be directed to your Medicare claims administration contractor. As indicated above, we are hopeful that Congress will take action to eliminate the mandatory payment reductions.