The American Hospital Association has asked CMS to clarify how Medicare Advantage plan providers should implement a 2 percent pay cut due to sequestration.
In a letter to CMS Administrator Marilyn Tavenner, AHA Executive Vice President Rick Pollack expressed concern on behalf of the AHA that some Medicare Advantage providers are erroneously cutting payments to hospitals. Some AHA members and state hospital associations have told the organization a considerable number of the private Medicare plans seem to have misunderstood the sequestration cuts.
In May, CMS instructed health insurers administering Medicare Advantage plans to review their contracts with hospitals to determine whether or how to apply sequestration cuts. Because CMS has not yet published Medicare pay rates factoring in sequestration cuts for hospitals, plans shouldn't enact the pay cuts yet if their contracts with hospitals use Medicare reimbursement as a reference point, according to the AHA.
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