Anesthesia Practices: Questions and Answers Regarding the 2% Medicare Payment Cut
ABC is receiving some very good questions from anesthesia and pain practices regarding more details on how the sequestration 2% Medicare payment cut will impact their reimbursement. We are continuing to monitor various Medicare carriers’ websites, including Palmetto, CGS, Novitas, First Coast Service Options and NHIC. These Q&As can help you track and ensure proper payments.
Question:
Does the 2% payment reduction under sequestration apply to the payment rates reflected in Medicare fee-for-service fee schedules or does it only apply to the final payment amounts?
Answer:
Payment adjustments required under sequestration are applied to all claims after determining the Medicare payment including application of the current fee schedule, coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. All fee schedules, Pricers, etc., are unchanged by sequestration; it’s only the final payment amount that is reduced.
Question:
How is the 2% payment reduction under sequestration identified on the electronic remittance advice (ERA) and the standard paper remittance (SPR)?
Answer:
Claim adjustment reason code (CARC) 223 is used to report the sequestration reduction on the ERA and SPR.
Question:
What is the verbiage for CARC 223?
Answer:
“Adjustment code for mandated Federal, State or local law/regulation that is not already covered by another code and is mandated before a new code can be created.”
Question:
Will the 2% reduction be reported on the remittance advice in a separate field?
Answer:
For Part B physician/practitioner, supplier, and institutional provider outpatient claims, the adjustment is reported at the line level.
Question:
When will the Centers for Medicare & Medicaid Services (CMS) post an updated 2013 fee schedule based on the 2% cut?
Answer:
At this time, CMS will not post an updated 2013 fee schedule. The fee schedule you use for 2013 will remain the same.
Question:
Will CMS apply the fee reduction to claims processed starting April 1?
Answer:
CMS will apply the cut to claims with a date of service of April 1 or later. CMS will pay claims from January through March at the posted fee schedule amount without a 2% reduction.
Question:
Will CMS hold claims like it does when the fee schedule undergoes changes?
Answer:
No plans have been announced by CMS to do so. We will keep monitoring their website and advise you accordingly if there is a change.
In summary, ABC would like to share these tips with you regarding the sequestration:
- Don’t attempt to collect the 2% from the patient or any other health insurance plan. CMS is clear that providers may not pass on the cut to their patients or other payers.
Pay attention to the claim’s date of service. Claims with dates of service on or after April 1 will receive the 2% cut.
Don’t resubmit affected claims if retroactive fixes are enacted unless your MAC tells you to. While CMS has yet to indicate that they will hold claims due to the sequestration payment cut this policy may be reversed at some point in the future. Generally, when past Medicare cuts have gone into effect and been rescinded by Congress at a later point, the Medicare carriers have reprocessed claims automatically.