CMS Provides Guidance on Sequestration Cut Implementation

March 11, 2013

As previously reported, as a result of sequestration, a 2% cut in Medicare payments will take effect on April 1, 2013, and will affect all ASCs who provide Medicare services. On Friday, the Centers for Medicare & Medicaid Services (CMS) released some clarification as to how those cuts will be calculated, and when they will be triggered:


“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 regarding reimbursements should be directed to your Medicare claims administration contractor. ASCA will continue to closely monitor this situation and provide timely updates to members as they become available.

For more information, please contact Steve Miller at