Mandatory “Sequestration” Reductions: Impacts to Florida Blue FEP Providers

On Monday, April 1, 2013, CMS implemented a two percent reduction in their Medicare provider payments as part of “sequestration” required by the Budget Control Act. Payments from the Federal Employee Program (FEP) will be impacted where FEP acts as a secondary payer to a Medicare primary claim.

Medicare Assigned Claims                                                                                                                             

For Medicare assigned claims, FEP will not pick up the two percent reduction amount. All Medicare assigned provider claims with a date of service on or after April 1, 2013, will be subject to a two percent payment reduction. The FEP member is not financially responsible for the two percent reduction in payment due to sequestration, and should not be balance billed.

Medicare Unassigned Claims

For Medicare unassigned claims, FEP will pick up the two percent reduction amount. All Medicare unassigned provider claims with a date of service on or after April 1, 2013, will be subject to a two percent payment reduction. However, for unassigned claims, FEP will base its payment on the reduced Medicare Benefit Payment. This results in FEP, not the FEP member, covering the sequestration two percent payment reduction.