AMA Wire

Wednesday, March 20, 2013

This Week's News

Medicare pay cut will kick in April 1 under federal budget sequester

Medicare pay cut will kick in April 1 under federal budget sequester

The 2 percent across-the-board cut to Medicare physician payments mandated by the federal budget sequester will begin April 1, the Centers for Medicare & Medicaid Services (CMS) confirmed in a recent announcement. 

Physicians will see the payment reduction applied to their fee-for-service claims with a date of service of April 1 or later. The 2 percent cut will apply to the payment amount after it has been adjusted for beneficiary coinsurance, deductibles and any applicable Medicare secondary payments. The allowed charge amounts remain unchanged.

Payments to other health care providers likewise will be reduced by 2 percent. The reduction will apply to claims with an April 1 or later date of service, date of discharge, start date of durable medical equipment rental or start date of multi-day supplies.

Although the 2 percent cut will not impact beneficiary payments for deductibles and coinsurance amounts, the cut will be applied to the reimbursement Medicare beneficiaries receive for unassigned claims.

Visit the AMA's Medicare Participation Kit Web page to see examples of how the sequester cut will affect physician payments and Medicare beneficiary reimbursement.

The AMA continues to urge Congress to reform the Medicare payment system to eliminate continued threats of payment cuts and support a higher-performing system of care.

"The sequestration and sustainable growth rate formula cuts threaten access to care for patients and prevent needed Medicare improvements and innovations," AMA President Jeremy A. Lazarus, MD, said. "Now is the time to improve Medicare for the thousands of seniors enrolling each day and for future generations."