Currentcare_continuumPolicy n05673

Sequestration Policy

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Defines Care Continuum's Medicare Advantage reimbursement treatment for federal sequestration (percentage payment reductions) and who it affects (Network Health Medicare Advantage membership).

Policy Summary

Payercare_continuum

PolicySequestration Policy

Policy CodePolicy n05673

Change TypeNo material change

Effective DateJun 2, 2027

Last ReviewJun 2, 2027

Next Review DateJun 2, 2027

Key ActionApply sequestration reduction after member cost share and coordination of benefits and add CARC 253 to claim lines where sequestration is applied.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

2%standard reduction

1%Apr–Jun 2022 rate

May 1, 2020–Mar 31, 2022CARES Act waiver period

CARC 253CARC used

Sequestration Application Rules

Sequestration application rules

Application rules for sequestration on Medicare Advantage claims

For dates of service or discharge Apr 1, 2013–Apr 30, 2020: apply 2% reduction to physician, facility, ancillary and other reimbursements for Medicare Advantage membership.

For dates of service May 1, 2020–Mar 31, 2022: 2% reduction waived per CARES Act Section 3709.

For dates of service Apr 1, 2022–Jun 30, 2022: apply 1% reduction.

For dates of service on/after Jul 1, 2022: apply 2% reduction until further notice.

Reduction is applied after determination of member cost share (deductible, coinsurance, copay) and any coordination of benefits.

Policy Summary

Payercare_continuum

PolicySequestration Policy

Policy CodePolicy n05673

Change TypeNo material change

Effective DateJun 2, 2027

Last ReviewJun 2, 2027

Next Review DateJun 2, 2027

Key ActionApply sequestration reduction after member cost share and coordination of benefits and add CARC 253 to claim lines where sequestration is applied.

SourceLink

On This Page

OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.

Currentcare_continuumPolicy n05673

Sequestration Policy

Customize your policy alerts

Sign up for care_continuum Policy n05673 alerts

Get alerted when Policy n05673 changes without checking for updates manually.

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Defines Care Continuum's Medicare Advantage reimbursement treatment for federal sequestration (percentage payment reductions) and who it affects (Network Health Medicare Advantage membership).

Policy Summary

Payercare_continuum

PolicySequestration Policy

Policy CodePolicy n05673

Change TypeNo material change

Effective DateJun 2, 2027

Last ReviewJun 2, 2027

Next Review DateJun 2, 2027

Key ActionApply sequestration reduction after member cost share and coordination of benefits and add CARC 253 to claim lines where sequestration is applied.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

2%standard reduction

1%Apr–Jun 2022 rate

May 1, 2020–Mar 31, 2022CARES Act waiver period

CARC 253CARC used

Sequestration Application Rules

Sequestration application rules

Application rules for sequestration on Medicare Advantage claims

For dates of service or discharge Apr 1, 2013–Apr 30, 2020: apply 2% reduction to physician, facility, ancillary and other reimbursements for Medicare Advantage membership.

For dates of service May 1, 2020–Mar 31, 2022: 2% reduction waived per CARES Act Section 3709.

For dates of service Apr 1, 2022–Jun 30, 2022: apply 1% reduction.

For dates of service on/after Jul 1, 2022: apply 2% reduction until further notice.

Reduction is applied after determination of member cost share (deductible, coinsurance, copay) and any coordination of benefits.

Policy Summary

Payercare_continuum

PolicySequestration Policy

Policy CodePolicy n05673

Change TypeNo material change

Effective DateJun 2, 2027

Last ReviewJun 2, 2027

Next Review DateJun 2, 2027

Key ActionApply sequestration reduction after member cost share and coordination of benefits and add CARC 253 to claim lines where sequestration is applied.

SourceLink

On This Page

Sequestration Codes & Rates

Sequestration CARCmixed

253	Sequestration - reduction in federal payment (CARC)

Sequestration rate

Standard sequestration rate2% reduction to Medicare claims reimbursement (applies to physician, facility, ancillary and other reimbursements)

Apr 1, 2022–Jun 30, 2022 rate1% reduction to Medicare claims reimbursement

Waiver period (CARES Act Section 3709)May 1, 2020–Mar 31, 2022 — 2% reduction waived

Initial effective periodApr 1, 2013–Apr 30, 2020 — 2% reduction applied

Post‑Jul 1, 2022 guidanceOn/after Jul 1, 2022: 2% reduction applies until further notice

Billing and Reporting Guidance

Billing Rule

Apply sequestration after member cost share and report with CARC 253

Sequestration reductions are applied after the claims adjudication system determines member cost share (deductible, coinsurance, copay) and any coordination of benefits; add CARC 253 to each claim line where sequestration is applied.

Apply sequestration reduction after member cost share and coordination of benefits are determined.
Append Claims Adjustment Reason Code (CARC) '253/Sequestration - reduction in federal payment' to each claim line indicating sequestration was applied.

Key Terms

Definition — Sequestration

DefinitionSequestration is a federal payment reduction applied to Medicare claims as announced by CMS; implemented as a percentage reduction to reimbursement.

Claim indicatorWhen applied, add Claims Adjustment Reason Code (CARC) 253: 'Sequestration - reduction in federal payment' to each claim line.

Application timingReductions are applied after determination of member cost share (deductible, coinsurance, copay) and any coordination of benefits.