Sequestration Means 2% Medicare Cut to Health Care Providers Effective 4/1 March 6, 2013 Medicare, Payment Medicare cuts, Sequester Cuts, Sequestration 0 Across-the-board federal budget cuts were triggered on March 1 because Congress failed to come to an agreement on how to reduce the federal deficit. Although it is still possible that Congress will reach some sort of a compromise before most of the cuts take effect on April 1, physicians should prepare for a 2% reduction in reimbursement from the Medicare program beginning in April. The 2% Medicare "sequestration" cuts are part of the $1.2 trillion in cuts required by the Sequestration Transparency Act, part of a deal worked out to end last year's debt-ceiling crisis. The cuts are evenly split between defense spending and discretionary domestic spending. The mandatory Medicare cuts will result in a savings of $11 billion in 2013. Medicaid is exempt from the cuts. The Medicare cut will impact physicians, hospitals, other health care providers, health plans, and prescription drug plans but will not directly impact beneficiaries. Although the 2% cut is lower than the reductions in other federal agencies, physicians said it will still have a significant impact. Dr. Jeremy Lazarus, president of the American Medical Association, said that the cut comes at an especially bad time because physician payment rates have risen only about 4% over the last decade or so while the cost of caring for patients has climbed by more than 20%. "A 2% cut erases half of what’s been gained over the past 12 years and continues to widen that gap between what Medicare pays and what it actually costs to care for patients," Dr. Lazarus said. "This is on top of the yearly concerns about even larger cuts that we’ve been going through over the last decade." The cuts, and the back-and-forth in Washington over sequestration, add to physicians’ general concerns about the instability of Medicare payments, Dr. Lazarus said. That could lead some physicians to stop accepting Medicare patients. "It’s a very difficult time to plan your practice and plan hiring new employees because you don’t understand what you’re going to be getting paid and what you can afford," said Dr. David L. Bronson, president of the American College of Physicians. Click here to view the Sequestration FAQ and the impact on California physicians. Source: Internal Medicine News, Mach 4, 2013. Comments are closed.
