CMS updates on 2% cut

Tuesday, April 23, 2013

WASHINGTON – CMS contractors this week provided new and revised questions and answers about the 2% cut in Medicare payments that went into effect April 1 as part of automatic spending cuts.

The new and revised Q&As are as follows:

Question: If a durable medical equipment capped rental period started before April 1, 2013, are the rental payments for months after April 1, 2013, subject to the 2% reduction?

Answer: Any claims for rental payments with a "FROM" date of service on or after April 1, 2013, will be subject to the 2% reduction, regardless of when the rental period began. For example, if a capped rental wheelchair was provided in February 2013, the monthly rental payment for May 2013 would be subject to the 2% sequestration reduction. The initial and subsequent monthly rental payments billed with a "FROM" date of service beginning on or prior to March 31, 2013, would not be affected by the 2% reduction.

Question: How long is the 2% reduction to Medicare fee-for-service claim payments in effect?

Answer: The law specifies that the 2% reduction to Medicare fee-for-service payments resulting from the sequestration order that the President was required to issue on March 1, 2013, applies to all payments for services furnished in the one-year period after the reductions begin. For Medicare, the reductions begin on the first day of the first month after the order is issued, meaning they began on April 1, 2013. Accordingly, this sequestration order covers all payments for services with dates of service or dates of discharge (or a start date for rental equipment or multi-day supplies) April 1, 2013, through March 31, 2014.

Question: Are drugs excluded from the 2% reduction?  

Answer: No. All fee-for-service Medicare claim payments are subject to the 2% reduction. There are no exemptions provided in the law for drugs or any other healthcare item or service provided under the fee-for-service program.

For a comprehensive list of Q&As on the cut, go here:


I'm curious - have any providers spoken to their accounting firm regarding the 2% sequestration cuts?


Seems there is a bit of varying theory. Would any providers be comfortable sharing their plan regarding the accounting of this challenge?