Practice Support Update Blog

Medicare Payment Adjustments

Apr 27, 2022 3:45:00 PM / by Practice Support Team

If you are seeing changes in reimbursements for Medicare services, it may be related to the sequestration payment adjustments.

Payment  Concept. Button on Modern Computer Keyboard with Word Partners on It.In August 2021, each MIPS eligible clinician received a 2020 MIPS Final Score and 2022 payment adjustment information as part of their performance feedback.  The 2022 MIPS payment adjustment, determined by the 2020 Final Score, will affect payments made for services in calendar year 2022.

Three types of payment adjustments:

Type of Payment Adjustment Impact to Payments in 2022
Positive Each covered professional service furnished in 2022 is reimbursed more than 100% - increase to paid amount
Neutral Each covered professional service you furnish in 2022 is reimbursed 100% - no increase or decrease to paid amount
Negative Each covered professional service you furnish in 2022 is reimbursed less than 100% - decrease to paid amount

As a result of provisions and related to COVID-19 relief efforts, the Center for Medicare & Medicaid Services (CMS)  allowed several flexibilities related to MIPS reporting in 2020 that affect 2022 payment adjustments. 

The Protecting Medicare and American Farmers from Sequester Cuts Act impacts payments for all Medicare Fee-for-Service (FFS) claims:

  • No payment adjustment through March 31, 2022
  • 1% payment adjustment April 1 – June 30, 2022
  • 2% payment adjustment beginning July 1, 2022

As an example, (if you are subject to the 1% negative payment adjustment), the total allowed payment for a particular service is $100 and the beneficiary has a 20% co-insurance, the beneficiary would be responsible for paying the provider the full $20 in co-insurance. The remaining 80% that is paid by Medicare would be reduced by 2% under the FY2018 sequestration order, or $1.60 in this example, resulting in a total Medicare payment of $78.40. In total, the provider would receive a payment of $98.40. This reduced payment is considered payment in full and the Medicare beneficiary is not expected to pay higher copayments to make up for the reduced Medicare payment.

(source: Congressional Research Service )

Learn more in the Quality Payment Program 2022 Merit-based Incentive Payment System (MIPS) Payment Year Payment Adjustment User Guide


Tags: MACRA, MIPS, practice management

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