The Centers for Medicare & Medicaid Services (CMS) Retiree Drug Subsidy (RDS) Program is subject to the mandatory reductions in federal spending, or sequestration, in accordance with the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), as amended. Beginning with plan sponsors' incurred costs reported on or after April 1, 2013, and for the duration of the sequestration period, CMS applies a mandatory payment reduction to all plan months when calculating each interim payment request and the Reconciliation final payment request.
Previous announcements related to the RDS sequestration policy include:
- Interim Sequestration Starts Now! for important updates to the RDS Mandatory Payment Reduction policy. – January 2, 2024
- Changes to the Suspension of Sequestration for the Retiree Drug Subsidy Program Take Effect on July 1, 2022 for important updates on Mandatory Payment Reduction contained in S.610 – “Protecting Medicare and American Farmers from Sequester Cuts Act.” – December 10, 2021
- Suspension of Sequestration for the Retiree Drug Subsidy Program Extended Through December 2021 for important updates on Mandatory Payment Reduction contained in H.R.1868 – “To prevent across-the-board direct spending cuts, and for other purposes.” - April 29, 2021
- Extension to the Suspension of Sequestration for the Retiree Drug Subsidy Program for important CARES Act and Consolidated Appropriations Act updates on Mandatory Payment Reduction. - December 30, 2020
- Mandatory Payment Reduction in CMS' Retiree Drug Subsidy Reconciliation Payments (pdf, 232KB) - This document provides information regarding the mandatory payment reduction. - April 19, 2014