New Claim Adjustment Reason Code (CARC) 253 to Identify a Reduction in Federal Spending Due to Sequestration

President Obama issued a sequestration order on March 1, 2013. As a result, Medicare Fee-For-Service claims, with dates of service or dates of discharge on or after April 1, 2013, incur a two percent reduction in Medicare payment. CMS previously assigned CARC 223 (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) to explain the adjustment in payment.

Effective June 3, 2013, a new CARC was created and will replace CARC 223 on all applicable claims. The new CARC is 253 – Sequestration – Reduction in Federal Spending.