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Mandatory Payment Reduction

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:

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