Home Health & Hospice Week

Unless your contracts specifically allow your MAO to pass on its 2 percent cuts to you, appeal.

You knew there would be cuts to your Medicare payments on April 1 due to Medicare’s 2 percent sequestration reduction — but perhaps you didn’t expect Medicare Advantage to also jump on the pay-cutting bandwagon and similarly slash your payments.

As it turns out, they probably shouldn’t be cutting your pay at all, the Centers for Medicare & Medicaid Services says in a surprising new memorandum that actually reminds Medicare Advantage payers to stop taking 2 percent out of providers’ checks.

Although Medicare Advantage has been hit with the sequestration cut that impacted Medicare payments on April 1, Medicare Advantage must still must honor the contracts it has with providers, says Cheri Rice, director of CMS’s Medicare Plan Pay-ment Group, in a May 1 memorandum to Medicare Advantage Organizations (MAOs).

"MAOs are not permitted to modify the currently-approved benefit or cost sharing structure in any way," Rice says in the memo. "This includes increases in premiums or cost sharing, or reductions in benefits in an attempt to offset the lower payments due to sequestration."

The caveat: If you bill Medicare Advantage but you aren’t contracted with the plan, then sequestration cuts will apply, Rice adds. "A non-contract provider must accept, as payment in full, the amount that it could collect if the beneficiary were enrolled in the Medicare Fee-for-Service program," the letter states. Since Medicare Fee-for-Service is subject to the 2 percent cuts, so too will be Medicare Advan-tage payments to non-contracted providers.

If You See MAO Cuts: If you’ve noticed that your Medicare Advantage payer has been cutting your pay by 2 percent since April 1, double-check your contract to determine whether they are allowed to do so. If your contract does not include verbiage that lets the program pass on the cuts to you, then you should appeal your claim reductions to your Medicare Advantage payer.

Resource: The American Medical Asso-ciation has posted CMS’s letter at www.ama-assn.org/resources/doc/washington/cms-medicare-sequester-guidance-01may2013.pdf .