As previously reported, on March 1, 2013, President Obama issued a sequestration order (required by law) that triggers automatic cuts to most federal programs, including a 2% cut to Medicare payments to providers and health plans. The cuts generally apply to Medicare fee-for-service (FFS) claims with dates-of-service or dates-of-discharge on or after April 1, 2013. CMS has provided to its contractors a number of questions and answers on Medicare and sequestration that address, among other things, the use of claim adjustment reason code (CARC) 223 to report the sequestration reduction (Adjustment code for mandated Federal, State or local law/regulation that is not already covered by another code and is mandated before a new code can be created). CMS also confirms that sequestration modifies final FFS payments to providers, not fee schedules and pricers, and it provides examples of how claims are calculated after application of patient cost-sharing.