Medicare Sequester Fee Cut Begins April 1

Medicare will cut physician payments for fee-for-service claims with dates of service on or after April 1 by 2 percent, thanks to the failure of Congress and President Obama to avoid across-the-board federal spending reductions required by the federal budget sequestration that took effect March 1.

The Centers for Medicare & Medicaid Services said it will apply the reduction to claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

The Medscape Today website reported Medicare also will cut incentive payments for meaningful use of electronic health records by 2 percent. Medicaid incentives are not affected because they are not subject to sequestration, it said.

Medicare funding for graduate medical education also will drop 2 percent, while total federal health care spending will decrease by about 5 percent. Among the areas facing cuts are research and public health programs of the National Institutes of Health, the Centers for Disease Control and Prevention, and the Substance Abuse and Mental Health Services Administration.

The Texas Department of State Health Services is asking physicians to complete a survey on the impact of the cuts on mental health and substance abuse programs by 5 pm CDT March 22.

The Texas Medical Association and the American Medical Association are still lobbying Congress to repeal the Sustainable Growth Rate (SGR) formula that threatens to cut Medicare payments to physicians by 27 percent on Jan. 1, 2014. TMA, 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."

"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," warns an AMA state-by-state analysis of the impact of sequestration and SGR cuts.

Action, March 18, 2013