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Cuts to Medicare Physician Payments as Part of Sequestration Increasingly Likely

Tuesday, February 12, 2013

A mandatory two percent cut to Medicare and Medicare physician payments appear increasingly likely unless Congress acts before April 1, 2013 to avert the Budget Control Act's sequestration process, or across-the-board cuts.  These sequestration cuts were originally scheduled to begin on January 2, 2013 and were postponed for two months by the compromise legislation on the fiscal cliff

The Congressional Budget Office (CBO) estimates the 2013 cuts to Medicare at $9.9 billion, which is inclusive of the two percent cut to Medicare payments to physicians.  (Medicaid and the Children's Health Insurance Program are excluded from the automatic spending cuts).  Other government health spending will also face a significant reduction in the range of 5.3 percent in 2013 and 7.8 percent in following years.

Negotiations to avert sequestration are expected to continue through the remainder of the month.  However, parties involved do not appear to be particularly optimistic that an agreement can be reached to avoid the cuts.  

ASA continues to closely monitor the situation and advocate against the sequestration cuts.

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