Unbiased Analysis of Today's Healthcare Issues

The Sequester hits Medicare

Written By: Jason Shafrin - Mar• 12•13

If you are a physician, hospital, or other provider that treats Medicare patients, how will the sequester effect you?  In March 2013, not at all.  Starting April 1, 2013, however, get ready for a bit of a haircut. A Centers for Medicare and Medicaid Services (CMS) memorandum states the following:

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.

If Medicare reimbursement rates keep falling, Medicare may soon look like Medicaid, where beneficiaries have a difficult time accessing physicians and other providers.

If you are a Medicare beneficiary, does the sequester-induced cuts mean that your coinsurance and deductibles will also fall by 2 percent? Not so fast. Only payments made from Medicare are dropping.

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.


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