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amount, Medicare beneficiaries remain responsible for any unmet deductible as well as the full 20 percent coinsurance on assigned claims. For example, if the Medicare allowable for a service is $100, and the patient has met his or her annual deductible, you may collect $20 from the patient at the time of delivery. Medicare will then reimburse you 98 percent of $80, or $78.40. The total reimbursement for the service in this scenario would be $98.40.


Are other insurers allowed to reduce their reimbursement by 2 percent as a result of sequestration?


No. Assuming the terms of your contract with an insurance company involve reimbursement based on a percentage of the current Medicare fee schedule, insurance companies may not reduce their reimbursement due to sequestration. Since the fee schedule remains the same as prior to sequestration, any discounts negotiated off of the current Medicare fee schedule also should remain unchanged.

reduction will be applied each year after the annual update to the Medicare fee schedule. If Congress and the White House reach agreement on a new federal budget, sequestration will end as an immediate result of the passage of the law establishing a new budget.

Q: A:

How much money will sequestration “save?�

The Congressional Budget Office has estimated that in 2013, sequestration-related reductions to Medicare reimbursement will

result in $10 billion in savings to the Medicare program. These questions represent a small sample of the questions AOPA has received regarding sequestration and its impact on reimbursement for O&P services. If you have additional questions, please contact AOPA. a Joseph McTernan is AOPA’s director of coding and reimbursement services. Reach him at


Are non-assigned claims subject to the 2 percent sequestration reduction?


Yes. Medicare reimbursement sent directly to the patient for non-assigned claims will be reduced by 2 percent as a result of sequestration. You are not obligated to address this reduction when determining what you charge the patient on a non-assigned basis and may continue to charge the same amount for services that were delivered prior to the implementation of sequestration cuts.

Q: A:

When will sequestration end?

If the federal government cannot agree on a federal budget, sequestration is scheduled to last until 2022. The effects of sequestration are not cumulative, however, meaning that the 2 percent JUNE 2013 O&P Almanac


June 2013 Almanac