Sequester Cuts Medicare Fees Starting April 1

Medicare payments to physicians will drop 2 percent because Congress and President Obama failed to avoid the sequestration budget cuts. Although the sequestration takes effect March 1, an American Medical Association advisory says the Medicare fee reductions will not begin until April 1.

AMA said some details of the Medicare sequester still have not been made public. "For example, we do not know if the 2-percent payment cut will be applied to allowed charges under the Medicare physician fee schedule (and so affect beneficiary copayments), or if it will be applied only to the physician's Medicare claims payment. It also is not clear whether the cuts will be applied to claims with a date of service on or after April 1, or to all claims payments made on or after April 1," the advisory said.

Still hanging over physicians' heads is an almost 27-percent cut in Medicare payments fueled by the Sustainable Growth Rate (SGR) formula. That cut was supposed to take effect Jan. 1, but Congress and the president delayed it for a year when they reached a deal Dec. 31 to avoid the so-called "fiscal cliff."

The Texas Medical Association, AMA, and more than 100 other state medical associations and specialty societies said in letter to Congress last fall that sequestration and SGR cuts "would not only impede improvements to our health care system, it could lead to serious access-to-care issues for Medicare patients as well as employment reductions in medical practices."

Citing preliminary Office of Management and Budget estimates, the Medicare Newsgroup website said sequestration will cost Medicare providers nationwide $11 billion in reduced payments in 2013. "In Texas, the jobs of 258,529 employees of medical practices, as well as access to care for 3,187,332 Medicare patients and 869,573 TRICARE patients are at risk due to these cuts," says an AMA state-by-state analysis of the impact of sequestration and SGR cuts.


Action, March 1, 2013


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