Payment Reductions on Medicare Claims

Date Issued: 2/6/2018

In 2013, the Centers for Medicare & Medicaid Services (CMS) reduced premium payments to health plans, providers and suppliers by two percent as a result of cuts in federal spending. This reduction is known as sequestration.

EmblemHealth did not implement the reductions across the board to all providers at that time. Instead, EmblemHealth began applying a two percent payment reduction (sequestration) on January 1, 2018 on all professional and facility Medicare claims. The reduction will apply to claims submitted after January 1, 2018, regardless of date of service.

The claims payment adjustments apply after determining coinsurance, applicable deductibles, and any Medicare Secondary Payment adjustments. These reductions are indicated on the remittance advice with a new adjustment code. The new adjustment code is 5B9.

The provision in your EmblemHealth contract about reimbursement on the prevailing CMS rate covers the two percent reduction for Medicare services that are paid based on their reimbursement methodology.


Last Updated: 02/06/18
JP41189