2 percent Medicare cut went into effect April 1: Novitas answers your questions

posted 04.03.13

Because Congress failed to reach a budget deal to block the Budget Control Act’s sequestration cuts, President Obama issued a sequestration order on March 1, 2013, requiring across-the-board reductions in federal spending.

This includes a 2 percent cut in payments for Medicare fee-for-service claims with service or discharge dates on or after Monday, April 1, 2013.

To prevent making overpayments, interim and pass-through payments related to the Medicare cost report will be reduced by 2 percent, according to Novitas Solutions, Texas’ Medicare contractor. Beginning April 1, the 2 percent reduction will be applied to periodic interim payments, critical access hospital and cancer hospital interim payments, and pass-through payments for graduate medical education, organ acquisition, and Medicare bad debts.

Novitas has published a list of key questions and answers related to the sequestration, including whether the 2 percent reduction applies to rates in the fee schedule or in the final payment amount (the latter) and whether the reduction is based on the date of service or date of receipt (generally both except for durable medical equipment).

To view the Q&A, go to www.novitas-solutions.com/sequestration/index.html. Additional questions about reimbursement should be directed to Novitas Solutions.