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June 28, 2022

Reminders About Sequestration

On December 10, 2021, the Protecting Medicare and American Farmers from Sequester Cuts Act was passed and impacts payment for all Medicare Fee-for-Service (FFS) claims:

  • No payment adjustment through March 31, 2022
  • 1% payment adjustment April 1 – June 30, 2022
  • 2% payment adjustment beginning July 1, 2022

The 2% payment reduction (sequestration) will be:

  • Applied to all Medicare FFS claims with a date of service / ”through” date of service on or after July 1, 2022
  • Calculated after the approved amount is determined and the deductible and coinsurance are applied
    • Note: For claims with DOS that span July 1, 2022 (e.g., 061522 – 071522), the approved amount is determined based on the entire claim (not DOS on or after July 1 only).
  • Reported with claim adjustment reason code (CARC) 253 (Sequestration – reduction in federal payment) on the remittance advice

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