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Mandatory Payment Reductions in the Medicare Fee-for-Service (FFS) Program – “Sequestration” (201303-02)

Spending-Cuts-ShutterstockThe Budget Control Act of 2011 requires, among other things, mandatory across-the-board reductions in Federal spending, also known as sequestration.  The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months.  As required by law, President Obama issued a sequestration order on March 1, 2013.  The Administration continues to urge Congress to take prompt action to address the current budget uncertainty and the economic hardships imposed by sequestration.

This listserv message is directed at the Medicare FFS program (i.e., Part A and Part B).  In general, Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment.  Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

The claims payment adjustment shall be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction.  The Centers for Medicare & Medicaid Services encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare’s reimbursement.

Questions about reimbursement should be directed to your Medicare claims administration contractor.  As indicated above, we are hopeful that Congress will take action to eliminate the mandatory payment reductions.

Therapeutic Shoes – Documentation Requirements

The National Government Services, Jurisdiction B Medical Review department recently conducted a widespread post pay probe for HCPCS codes A5500, A5501, A5512, and A5513.  A widespread post pay probe is a selection of paid claims reviewed for medical necessity based on a particular service from multiple suppliers.  The suppliers who had claims selected and reviewed for this probe have been sent final probe determination letters.  The letter indicates the probe review findings and any overpayment(s) identified. The claims that were found to have been paid in error have been adjusted and a demand letter has been generated.

The following are the most common errors found during the recent medical review audit of therapeutic shoes and inserts and clarification of documentation requirements.


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Shoe Orthoses Reduced Diabetes-Related Amputations

Long-term use of shoe orthoses significantly reduced diabetes-related amputations, according to study results recently presented at the International Society for Prosthetics and Orthotics World Congress in Hyderabad, India.

Researchers studied 114 Swedish patients with diabetes and a risk of developing foot ulcers. Over 2 years, patients wore one of three different types of shoe orthoses.

Results showed that the use of orthoses, podiatry, education and regular check-ups helped patients avoid foot ulcers. Overall, only 0.9% of participants developed new foot ulcers during the first year vs. an industry average of 3% to 8% reported in similar diabetic populations.

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