Frequently Asked Questions

Reduction Implementation

1. When will payments begin to be reduced?
2. How long will payments be reduced?
3. Will this payment reduction be for Date of Payment or for Date of Service?
4. Will payees be notified of the amount of payment reduction?
5. My payment was reduced by less than 2%. Why?
6. My payment was reduced by more than 2%. Why?
7. How is the State going to handle cases where reimbursement rates change and the 2% has been applied to the old rate? Will the payment difference be accounted for since the 2% to date has been calculated based on the original payment amount?

Question Number	Question	Answer
1 | top |	When will payments begin to be reduced?	Payments made for dates of service on or after April 1, 2011 will be reduced starting November 3rd, 2011.
2 | top |	How long will payments be reduced?	The payment reduction has been extended and will continue for payments made for dates of service through March 31, 2015 (regardless of date of payment).
3 | top |	Will this payment reduction be for Date of Payment or for Date of Service?	The payment reduction will be for dates of service on or after April 1, 2011.
4 | top |	Will payees be notified of the amount of payment reduction?	Yes, the Medicaid check or EFT amount will reflect the 2% reduction. Paper remittances will display the actual reduction amount as a recoupment identified by Financial Reason Code "FC2" and the corresponding description of "state mandated payment reduction". Similarly, the 835 electronic remittances will carry the reduction amount in the PLB segment with the qualifier J1.
5 | top |	My payment was reduced by less than 2%. Why?	Your payment may have been funded by a combination of appropriations, some exempted from by the reductions, while others are not exempted. Only the non-Federal State Funds portion of the payment appropriated in the Aid to Localities category is subject to the 2% reduction.
6 | top |	My payment was reduced by more than 2%. Why?	Reductions are limited to 2%. There are, however, many additional reasons why payments are reduced: retro rate adjustments, negative balances, audits, levies, etc. The claim may have been subject to one or more of these, in addition to the across the board reduction. Remittance statements detail the specific reductions.
7 | top |	How is the State going to handle cases where reimbursement rates change and the 2% has been applied to the old rate? Will the payment difference be accounted for since the 2% to date has been calculated based on the original payment amount?	The State has implemented into the system a process to generate an offset payment to account for the correct amount of the 2% reduction related to the retroactive rate changes. Retroactive rate changes will continue to be processed as they always have with this minor adaption.