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.
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.