Mandatory Payment Reductions in the Medicare Fee-for-Service Program Now in Effect

On Monday, April 1, a mandatory 2 percent across-the-board cut in Federal spending, including Medicare provider payments, took effect as required by the Budget Control Act of 2011.

How this Impacts the Medicare Fee-for-Service (FFS) program (i.e., Part A and Part B):

  • 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 two (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.
  • The claims payment adjustment shall be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

Talking With Your Patients

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.

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.

How do you plan to share this information with patients? We look forward to hearing your comments. If you have any resources or tips that you would like to share with other members of the Chapter, please send them along and we will post the information after review.


Questions about reimbursement should be directed to your Medicare claims administration contractor. In New York the National Government Services (NGS),  is the Part B contractor.  They can be reached through the Provider Contact Center: 866-837-0241 or by visiting the NGS web site:

Additional Resources:


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