Due to the Budget Control Act of 2011 and President Obama’s issuance of a sequestration order on March 1, 2013, CMS (Centers for Medicare & Medicaid Services) has announced that there will be reductions to the Medicare FFS program.

Medicare Payment Reductions

Payment reductions effective 4-1-13

Effective for claims with dates of service or dates of discharge on or after April 1, 2013 will be subject to a 2% reduction in the amount Medicare pays. This reduction will be calculated after the patient’s co-insurance or deductible have been determined.

For example if the Medicare allowed amount is $100.00, Medicare would normally apply $20.00 to patient co-insurance and pay the remaining $80.00. Under the new fee schedule with the 2% reduction, the patient would owe their $20.00 co-insurance and Medicare would pay $78.40 with the provider having to write off the $1.60 difference in the Medicare paid amount.