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IHSC – Managed Care

Medicare FFS Program

Mandatory Payment Reductions in the Medicare Fee-for-Service (FFS) Program - "Sequestration"

The Budget Control Act of 2011 requires, among other things, mandatory across-the-board reductions in Federal spending, also known as sequestration. The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months. As required by law, President Obama issued a sequestration order on March 1, 2013. The Administration continues to urge Congress to take prompt action to address the current budget uncertainty and the economic hardships imposed by sequestration.

This listserv message is directed at the Medicare FFS program (i.e., Part A and Part B). In general, Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment. Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

The claims payment adjustment shall be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare's payment to beneficiaries for unassigned claims is subject to the 2 percent reduction. The Centers for Medicare & Medicaid Services encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare's reimbursement. Questions about reimbursement should be directed to your Medicare claims administration contractor. As indicated above, we are hopeful that Congress will take action to eliminate the mandatory payment reductions.


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The Health Service Provider shall submit claims using the appropriate form.

The Health Service Provider shall ensure that all claims associated with detainee medical services are submitted to IHSC by mailing claims to the following address with a copy of the MedPAR:

ICE Health Service Corps
VA Financial Services Center
PO Box 149345
Austin, TX 78714-9345

Detention Facilities

All health services require an authorization from IHSC. It is the responsibility of the Detention Facility to:

  • Complete a MedPAR for health services via MedPAR. This application is for Detention Facilities Internet access. Fax an authorization request if you do not have Internet access or MedPAR is unavailable.
  • Locate the appropriate health service provider; schedule the appointment for the health service; and provide transport to the health service.
  • Provide a copy of the authorized MedPAR to the health service provider prior to or at the time of treatment. An authorized MedPAR must be provided to the health service provider in order to:
    • Convey the guidelines concerning which health services have been authorized for payment.
    • Ensure timely proper reimbursement to the health service provider for authorized payment of health services. (Information contained on an authorized MedPAR must be submitted by the health service provider on the appropriate claim form).
  • Notify your IHSC MCC of any unscheduled inpatient admissions within 24 hours after the admission occurs and submit a MedPAR.

For questions concerning completion of a MedPAR, please contact your IHSC MCC.

Updated: 01/07/2021