Important Reminder: Medicare FFS Claims Payment Adjustment (Sequestration) Resumes

Providers are reminded the Payment Adjustment (Sequestration) will be reinstated beginning April 1, 2022. The Protecting Medicare and American Farmers from Sequester Cuts Act impacts payments for all Medicare Fee-for-Service (FFS) claims in the following way:

• No payment adjustment May 1, 2020, through March 31, 2022
• 1 percent payment adjustment April 1 – June 30, 2022
• 2 percent payment adjustment beginning July 1, 2022

Claims with dates-of-service or dates-of-discharge on or after April 1, 2022, will incur a 1 percent reduction in Medicare payment through June 30, 2022. The payment adjustment percentage increases to 2 percent reduction beginning July 1, 2022. The claims payment adjustment will be applied to all claims after determining coinsurance, deductible, Merit-based Incentive Payment (MIPS) adjustments and any applicable Medicare Secondary Payment adjustments. Patients may not be billed for these reductions.

Part B Claim

Remittance Advice
This reduction appears on your remittance advice (RA) with CO-253 and an associated dollar amount. When the total allowed amount for an individual service is applied to the patient’s deductible the Sequestration reduction is not applied to that detail line.

Unassigned Claims
Although beneficiary payments for deductibles and coinsurance are not subject to the payment reduction, Medicare’s payment to beneficiaries for unassigned Part B claims is subject to the applicable percent reduction. CMS encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to have discussions with beneficiaries on the impact of sequestration on Medicare’s reimbursement. 

See CMS MLNConnects: 12/16/2021 for more information.