Medicare Compliance & Reimbursement

Medicare providers will bear some of the brunt of the sequester cuts.

You have till April 1, after which a potential two percent cut could erode your earnings. Congress’s failure to agree on a way to avert the $85 billion budget reduction, referred to as “the sequester,” means that the government needs to effect significant cuts to expenditures across the board from March 1. The bottom line is that Medicare payments will take a two percent hit, making a significant dent in your practice’s income. Fortunately, however, these cuts won’t kick in until a month after the main sequestration reductions. 

The scoop: Although the bulk of the government’s cuts took place on March 1, the two percent Medicare reductions aren’t actually scheduled to take effect until April 1. This gives most analysts hope that once the impact of the other sequestration cuts is felt by the rest of the government programs on March 1, Congress will be quick to fix the problem before the Medicare cuts take effect. Essentially, Medicare providers are hoping that this extra month will buy time in which the government can come to an agreement to avert the entire sequestration program.

Flashback: The sequester was supposed to impact your payments at the beginning of 2013, but the Middle Class Tax Relief Act was passed on Jan. 1, delaying the sequester for two months. Most practices expected Congress to take that time to find ways to avert the cuts, which did not happen.

Not only will physicians face Medicare cuts, but so will hospitals and nursing facilities, meaning that much of the healthcare system could face financial hardship as a result of the cuts if they do take place.

Keep an eye on these pages to find out if the cuts take place or whether Congress acts in time to avert them.