Important Information About Sequestration Reductions for Health Care Providers
As sequestration reductions have now been imposed by the Centers for Medicare & Medicaid Services (CMS), Humana has implemented the same reductions to network and non-network provider payments. All non-network providers and network providers who are reimbursed based on the Medicare reimbursement methodology, including using a fee schedule based off the Medicare payment system, percentage of Medicare Advantage premium, Medicare allowed amount or other Medicare calculations (e.g., resource-based relative value scale (RBRVS), diagnosis-related group (DRG), etc.) will have the same sequestration reduction applied in the same manner as CMS. This reduction applies to all Medicare Advantage plans.
The "sequestration reduction amount" for each affected claim will be identified on the explanation of remittance (EOR) providers will receive from Humana, according to the type of EOR, as follows:
- On electronic (835) remittances, the sequestration reduction amount will be noted by CMS (Centers for Medicare & Medicaid Services)-mandated claim adjustment reason code 223, with the description, “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.”
- On paper remittances, the “sequestration reduction amount” will appear as its own line item on each affected claim. Each affected claim will also be noted by CMS-mandated claim adjustment reason code 223 described above, as well as Humana reason code 21Q, with the description, “The amount deducted represents the percentage based on the sequestration from the Budget Control Act of 2011. The member shall not be held financially responsible for the sequestration amount.”
Questions may be directed to Humana provider relations by calling 1-800-626-2741, 8 a.m. to 5 p.m. CDT, Monday through Friday. Additionally, health care providers may refer to the Centers for Medicare & Medicaid Services’ Provider e-News (March 8, 2013) for more information.