Sequester Medicare Rate Cut Into Effect April 1

Medicare Advantage, Part A and Part B providers should expect a 2% reduction in payment based on submitted claims for services provided to Medicare beneficiaries beginning April 1, 2013, according to the American Speech Language Hearing Association (ASHA). The 2% payment adjustment required under sequestration is applied to each claim after payment is calculated based on the current fee schedule and any applicable co-pays, deductibles, and Medicare Secondary Payment adjustments have been applied. All fee schedules and pricers are unchanged by sequestration; only the final payment amount is reduced.

In other words, ASHA reminds providers that they should continue billing consistent with the published 2013 Medicare fee schedule rates according to their geographic region and collect the 20% Medicare co-payment based on those rates. For non-participating providers, calculations for the limiting charge should also be based on the published fee schedule rate, not including the 2% reduction. Providers cannot increase charges to Medicare beneficiaries to offset the reduced payment amount.

“As of the end of March, Congress has not taken action to reverse the series of automatic, across-the-board cuts (sequestration) to federal programs that were mandated under the Budget Control Act of 2011 (BCA),” says a statement from ASHA.

Under the requirements of the BCA, as amended by January's American Taxpayer Relief Act (ATRA), both defense and non-defense programs became subject to sequestration on March 1, reducing total funding by $85 billion for 2013. The law requires a reduction of federal spending totaling $1.2 trillion over the next 10 years. Several key mandatory programs-including Social Security, Medicaid, and the Children's Health Insurance Program (CHIP)-are held harmless and exempt from sequestration cuts, thus deepening the reduction for affected programs.

Questions related to Medicare reimbursement can be directed to the following email: Those who want more information regarding sequestration and federal legislation, should contact Ingrida Lusis, ASHA's director of federal & political advocacy, at

Rose Simpson