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Sequestration Resumes for Medicare Providers

Sequestration Resumes for Medicare Providers


Courtesy of the National Association for Home Care & Hospice (NAHC)

The Protecting Medicare and American Farmers from Sequester Cuts Act impacts payments for all Medicare fee-for-service claims. As a result of this legislation, a suspension on the sequestration was put in place due to the COVID-19 Public Health Emergency (PHE.) The sequestration was suspended through March 31, 2022.

Effective April 1, 2022, the one-percent sequestration payment adjustment will be applied for claims with dates of services from April 1, 2022, to June 30, 2022.

Of note, the sequestration payment adjustment will revert to the two percent rate for claims with dates of services as of July 1, 2022. This will bring the total sequestration rate to two percent, which was the rate in effect prior to the PHE. For home health providers, the adjustment applies to the respective “through” date on the claim.

The sequestration payment adjustment decrease will appear on the Remittance Advice (RA) with a Claim Adjustment Reason Code (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.

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