From the American Academy of Ophthalmology

Beginning today, Medicare physician claims submitted for reimbursement will be reduced by 2 percent as part of across-the-board cuts in federal agency spending caused by the sequestration process. Costs for drugs administered by the physician that are included in those claims are also subject to the 2 percent cut.

Beneficiary copayments and deductibles do not change as a result of sequestration. The cut is imposed only on the 80 percent portion of the allowed charge that a participating physician receives directly from Medicare. For example, if Medicare paid $100 directly to a physician for a service before sequestration, it would pay $98 for the same service after sequestration. However, the physician would continue to collect $20 from the beneficiary (80 percent of $100), not $19.60 (20 percent of $98).

The sequestration cut also applies to incentive payments that physicians receive for their participation in the Medicare Electronic Health Record Incentive Program and to ambulatory surgery center reimbursement. Sequestration cuts are scheduled to last for nine years (through 2021).

For more information, contact the Academy’s Governmental Affairs Division at 202.737.6662.