CMS Issues Some Details on Medicare Sequestration Cuts

Under current sequester law, reimbursements to health care providers in Medicare Parts A and B, including clinical laboratories and pathologists, are scheduled to be cut up to a maximum of 2 percent as of April 1. The Centers for Medicare and Medicaid Services (CMS) this month released some details on how the cut will be handled. In a March 8 provider alert the agency said that in general, Medicare fee-for-service claims with dates of service or discharge on or after April 1 will incur a 2 percent reduction. 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 on whether the date of service, or the start date for rental equipment or multiday supplies, is on or after April 1. The payment reduction is to be applied to all claims after determining any applicable coinsurance, deductible, and Medicare Secondary Payment adjustments. Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent reduction, Medicare’s payment to beneficiaries for unassigned claims is. Financial incentive payments for meaningful use of electronic health records also will be cut by 2 percent, CMS has confirmed, even for those who attested in the program before April 1.