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Sequestration – 2% Reduction for Medicare payments

(Last Updated On: September 5, 2017)

As required by law, President Obama issued a sequestration order on 03/01/2013 requiring across-the-board reductions in Federal spending. Because of this, Medicare claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payments. Claim Adjustment Reason Code 223 (the adjustment code for mandated Federal, State or local law/regulation that is not already covered by another code and is mandated before a new code can be created) will be used to report the sequestration reduction on the ERA and standard paper remittance. If you do electronic payment remittance with Practice Manager, we have a program fix to accommodate this 2% reduction. The remittance program will automatically write off the reduction without any hassle. Contact customer support for further information.

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