As per CARC Codes co 253 denial description is sequestration reduction. As per simple words Medicare approved the claim, but reduced the payment amount by 2% due to federal sequestration rules. Actually CO 253 is not denial , it is an adjustment as per federal law of USA government.
Why we get a CO 253 denial on claims?
The government of Unites States applies mandatory reduction on Medicare Fee-for-Service payments under sequestration. When Medicare processes a claim, it calculates the approved payment and reduces the final reimbursement by 2%.
Example of CO 253 denial:
Provider billed charge: $1000
Medicare allowed amount: $600
Medicare payment before sequestration: $480
Medicare applies 2% sequestration:
2% of $480 = $9.60
Final Medicare payment:
$480 – $9.60 = $470.40
he $9.60 should be posted as a contractual adjustment/write-off. You can get all detail in EOB – Explanation of Benefit.
So as per RCM process guidelines CO 253 denial description is it is an adjustment applied by fedral law not a denial so handle it properly as per EOB.