Reminder: 2% cut to Medicare reimbursement begins April 1

March 27, 2013

Physicians should expect a 2 percent reduction in reimbursement from the Medicare program across the board for all claims with dates of service on or after April 1. These cuts are the result of the Sequestration Transparency Act of 2012, which was part of a deal worked out between President Obama and Congress to address the debt ceiling crisis.

According to the Centers for Medicare and Medicaid Services (CMS), the 2 percent Medicare cuts will be applied to fee-for-service (Part A and Part B) claims with dates-of-service or dates-of-discharge on or after April 1, 2013. The claims payment adjustment will be applied to all claims after determining coinsurance, any applicable deductible and any applicable Medicare secondary payment adjustments.

Claims for durable medical equipment (DME), prosthetics, orthotics and supplies, including claims under the DME Competitive Bidding Program, will also be reduced by 2 percent for claims with dates-of-service on or after April 1, 2013.

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. CMS encourages Medicare physicians who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare's reimbursement.

The California Medical Association (CMA) is vigorously fighting the Medicare cuts. CMA leaders were in Washington, D.C., last month urging the California Congressional delegation to stop the cuts. We will keep fighting, but in the meantime, physicians should know about what to expect when Medicare when they bill Medicare after April 1.

Contact: Michele Kelly, (213) 226-0338 or mkelly@cmadocs.org.

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