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Sequestration

 

Sequestration General Information

President Barack Obama's sequestration order of March 1, 2013, requires a mandatory 2-percent reduction to Medicare payments effective April 1, 2013, according to the Centers for Medicare & Medicaid Services (CMS). HMSA is reducing Part A and Part B service payments to providers for all Medicare Advantage and plans and BlueCard Host Medicare Advantage claims by 2 percent. The reductions will affect:

 

HMSA Payment Due to Sequestration

The CMS Physician Fee Schedule is not changing as a result of the sequestration order. Only provider payments are affected by the 2% payment reduction. Accordingly, Medicare Advantage and BlueCard Host Medicare Advantage member copays, coinsurance and deductible amounts are not impacted and they are not responsible for the 2-percent payment reduction. See payment example below:

 

Medicare Eligible Charge Member Copayment HMSA Payment Amount Before 2% Reduction HMSA Payment After 2% Reduction
$100.00 $15.00 $85.00 $83.30

 

 

Medicare Crossover Claims Processing

 

Provider Medicare Assignment Status Member Coverage 2% Reduction Liability
Assigned Medicare Primary, HMSA Commercial Plan Secondary HMSA and member are not responsible for the 2% provider payment reduction to Medicare claim
Assigned Medicare Advantage primary, HMSA Commercial Plan secondary HMSA and member are not responsible for the 2% provider payment reduction to Medicare Advantage or claim
Unassigned Medicare Primary, HMSA Commercial Plan Secondary HMSA commercial plan will pay for the 2% provider payment reduction to Medicare claim
Unassigned Medicare Advantage or primary, HMSA Commercial Plan secondary HMSA commercial plan will pay for the 2% provider payment reduction to Medicare Advantage or claim

 

The eligible charge for claims from providers who accept Medicare assignment will be reported on the RTP as the Medicare Eligible Charge minus the 2 percent payment reduction amount from the primary claim.

 

 

Medicare Advantage and Provider Reporting

For assigned Medicare provider claims for Medicare Advantage and members we will use the following Report to Provider (RTP) message to reflect the 2% provider payment reduction: "HMSA's payment has been reduced by 2% due to sequestration. The member is not liable for this amount." will be the message used on the Report to Provider (RTP) to indicate the mandatory 2% provider payment reduction was applied to a claim service line.

 

For unassigned Medicare provider claims for Medicare Advantage members we will use the following Report to Provider (RTP) message to reflect the 2% provider payment reduction: "HMSA's payment has been reduced by 2% due to sequestration. Unassigned Medicare providers may bill the member for this amount. Providers should discuss the financial impact of this amount with Medicare Advantage members."

 

Message Code 253 will be used to indicate the 2% provider payment reduction was applied to a service line.

 

Sequestration Implementation Timeline

 

 

 


 

First Published:04/03/2013
Latest Revision:12/15/2017
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