CO-253Contractual ObligationPayment Adjustment
CO-253 Denial Code: Sequestration — federal payment reduction
The 2% federal sequestration reduction on Medicare payments — statutory, applied after deductible/coinsurance.
Why CO-253 happens
- ●Mandatory sequestration on all Medicare FFS payments
How to fix a CO-253 denial
- 1
Post as a contractual adjustment; never bill patients for sequestration
How to prevent it
Build the 2% into Medicare revenue expectations.
Drowning in CO-253 denials?
OakClaim works every denial within 48 hours and builds prevention rules so they stop recurring.