American Society of Hematology

Two Percent Payment Reductions in Medicare Fee-for-Service (FFS) Program Begin on April 1

Published on: March 29, 2013

Because the Congress was unable to reach an agreement on how to reduce the deficit, by law automatic, across-the-board spending cuts known as "sequestration" have been triggered and beginning April 1, 2013, a two percent cut in Medicare provider payments will take effect. Medicare Fee-for-Service (FFS) claims with dates-of-service or dates-of-discharge on or after April 1, will incur a two percent reduction in Medicare payments. Therefore, to prevent making overpayments, interim and pass-through payments related to the Medicare cost report will be reduced by two percent. Starting on April 1, the two percent reduction will be applied to Periodic Interim Payments (PIP), Critical Access Hospital (CAH) and Cancer Hospital interim payments, and pass-through payments for Graduate Medical Education, Organ Acquisition, and Medicare Bad Debts.

Though beneficiary payments for deductibles and coinsurance are not subject to the two percent payment reduction, Medicare's payment to beneficiaries for unassigned claims is subject to the two percent reduction. The Centers for Medicare & Medicaid Services encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare's reimbursement.

ASH continues to advocate for appropriate and stable Medicare physician reimbursement. Clinicians are strongly encouraged to join the Society's on-line advocacy campaign urging Congress to repeal the current payment formula and to find a balanced approach to deficit reduction.

Additional information about the implementation of this cut is available. Questions about reimbursement should be directed to your Medicare Administrative Contractor.

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