Sequestration reductions are back and will reduce Medicare payments by 1% for dates of service from April through June. The 2% reduction will resume for services on July 1, 2022, and after. This sequestration does not affect Medicare Advantage payments or VA payments.
The Protecting Medicare and American Farmers from Sequester Cuts Act impacts payments for all Medicare fee-for-service claims. As a result of this Act, a suspension on the sequestration was put in place due to the PHE. The sequestration was suspended through 3/31/2022.
Effective 4/1/2022, the 1% sequestration payment adjustment will be applied for claims with dates of services 4/1/2022–6/30/2022.
Of note, the sequestration payment adjustment will revert to the 2% rate for claims with dates of services as of 7/1/2022. This will bring the total sequestration rate to 2%, which was the rate in effect prior to the PHE.
The sequestration payment adjustment decrease will appear on the RA with a CARC 253, used to report the sequestration reduction. The code will appear as a CO 253 on the RA “Sequestration – reduction in federal payment” as the reason.
