Medicare Advantage Hospital Sequestration Reimbursement

Reimbursement Policy:
Medicare Advantage Hospital Sequestration Reimbursement

Effective Date:
January 1, 2022

Purpose:
To provide guidelines on the application of a sequestration reduction to payment rates for Hospital services for Horizon Medicare Advantage and Braven Medicare Advantage products. This claims adjudication policy applies to participating hospitals.

Scope:
This policy applies to Medicare Advantage (including Braven Health) plans/products.

Definitions:
Sequestration: The automatic spending cuts that occur through the withdrawal of funding for certain (but not all) government programs as established under the Budget Control Act of 2011 or other applicable federal laws that imposes an adjustment from CMS or other sponsors of government health care programs.

Policy:
Effective for dates of service January 1, 2022 and thereafter, Horizon BCBSNJ will apply a sequestration reduction to hospital payments for Horizon Medicare Advantage products and Braven Medicare Advantage products. The payment reduction will be equal to the then current sequestration percentage reduction applicable to federal Medicare payments to hospitals.

The reimbursement rates applicable to Managed Medicare products and agreed to by Horizon and hospitals in the hospital’s participation agreement are not changed.

Procedure:
Reimbursement for covered items and services for all Horizon BCBSNJ’s Medicare Advantage products, including Braven, will be reduced by a percentage commensurate to the then current sequestration percentage reduction applicable to federal Medicare payments to hospitals. The Sequestration payment adjustment will be applied at the final payment level after all other edits, rules, and adjustments have been applied.

Limitations and Exclusions:
While reimbursement is considered, payment determination is subject to, but not limited to:

Group or Individual benefit
Provider Participation Agreement
Routine claim editing logic, including but not limited to incidental or mutually exclusive logic, and medical necessity
Mandated or legislative required criteria will always supersede.

History:
09/08/2021: Policy approved

Policy149_v1.0_09082021