CMS Announces Sequestration Details

March 11, 2013

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On Friday, March 9th, Centers for Medicare and Medicaid Services (CMS) provided details on the sequestration cuts to the Medicare program that will go into effect on April 1, 2013.

  • 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.
  • Beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction BUT Medicare's payment to beneficiaries for unassigned claims is subject to the cut.

The sequestration, resulting from the Budget Control Act of 2011, was postponed by the American Tax Payer Relief Act of 2012. The 2% Medicare cut is part of broader cuts, including automatic spending cuts to national defense and other non-defense budget, to eliminate a total of $1.2 trillion from the federal budget over the next decade.