On April 1, 2013, The Centers for Medicare and Medicaid Services (CMS) imposed a mandatory 2% reduction in the Medicare Fee-for-Service (FFS) Program, also known as “Sequestration.” Sequestration reductions were reflected on the Medicare Explanation of Benefits (EOB) as Claim Adjustment Reason Code (CARC) number 223. This action affects FFS claims with dates of service or dates of discharge on or after April 1, 2013.
On January 6, 2014, CMS started using CARC number 253 for the sequestration reduction of 2%. This action affects FFS claims with dates of service or dates of discharge on or after January 6, 2014. Please reference the Washington Publishing Company for information on CARCs.
MO HealthNet Division (MHD) requires providers to bill Medicare crossover claims electronically on emomed. When billing electronically, the appropriate CARC number 223 or 253, as reflected on your Medicare EOB, must be listed once for every applicable detail along with the corresponding Medicare Sequestration Reduction amount.
The Medicare Part C replacement plans may be reporting the sequestration on the total paid amount on the EOB. To ensure claims are paid appropriately, providers should enter each paid line and apply the CARC to each paid line indicating the 2% reduction. Providers should calculate the 2% reduction for each paid line and ensure the CO-253s in the line detail equal the total amount of the reduction.