March 26, 2013
The Centers for Medicare and Medicaid Service’s implementation of the mandatory 2 percent cut for services on or after April 1 will affect reimbursements to rheumatology practices nationwide. This reduction in reimbursement will apply to all individual payments of eligible providers. The payment adjustment will be applied to all claims after determining the coinsurance, any applicable deductible, as well as any Medicare secondary payment adjustments.
Keep in mind, beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction and physician practice staff should continue to collect the 20 percent balance at the time of a patient’s visit. CMS encourages participating providers who bill claims on an unassigned basis to discuss the sequestration impact on Medicare’s reimbursement with their patients. Physicians can also assure their patients that they will be no changes in their Medicare coverage as the sequester cut is only applicable to payments.
For example:
A Medicare patient is seen in the office for a follow-up visit. The Medicare allowable is $106.83 for the level of service and the patient is responsible for $21.37 (20 percent of the allowed charges), the physician’s reimbursement from Medicare will be $83.76 (80 percent of the Medicare allowed amount minus the 2 percent reduction).
General Overview of Medicare Fee Schedule (with 2 percent cut)
Payment arrangement |
Total payment rate |
Amount from Medicare |
Payment amount from patient |
PAR physician |
100% Medicare fee schedule = $100 |
$78.40 (80% with additional 2% cut) carrier direct to physician |
$20 (20%) paid by patient or supplemental insurance (e.g., Medigap) |
Non-PAR/assigned claim |
95% Medicare fee schedule = $95 |
$74.48 (80% with additional 2% cut) carrier direct to physician |
$19 (20%) paid by patient or supplemental insurance (e.g., Medigap) |
Non-PAR/unassigned claim |
Limiting charge of 115% of 95% Medicare fee schedule (effectively, 109.25%) Medicare fee schedule = $109.25 |
$0 |
$74.48 (80% with additional 2% cut) paid by carrier to patient + $19 (20%) paid by patient or supplemental insurance + |
What can you do?
- Meet with your members of Congress. Members of the House and Senate are scheduled to be at home for a constituent work week March 25-April 5. Call their closest district office to schedule a meeting. ACR staff can assist you with setting up or preparing for your meetings. Contact staff at advocacy@rheumatology.org or (404) 633-3777 for assistance and to let us know how your meetings went.
- Call your members of Congress. Use the toll free grassroots action hotline to call your members’ offices 1-800-833-6354.
- Write to your members of Congress. Use the ACR Legislative Action Center to send email messages to your elected officials.
For specific physician reimbursement questions, contact Antanya Chung at achung@rheumatology.org or (404) 633-3777 ext. 818.
