Across-the-Board Cuts Kick-in; Climate Ripe for SGR Repeal

Across-the-board cuts to federal spending went into effect on March 1, impacting programs across the federal government's portfolio. A deal made just after the New Year delayed these cuts, known as sequestration, for two months to give Congress more time to find the cuts required by the Budget Control Act of 2011. However, Congress and the White House ultimately failed to come to an agreement to avoid the sequester.

As a whole, the 2013 sequester is $85.4 billion. While defense spending and non-defense domestic discretionary funding will see the steepest cuts, Medicare providers are faced with 2 percent payment cuts for the remainder of 2013 and through the next decade. Additionally, important public health and research programs will see big cuts as part of the cuts to domestic spending. Medicaid rates aren't affected by sequestration.

Without Congressional action, cuts are likely to start hitting providers within weeks. By law, Medicare may not pay claims sooner than 14 days after receipt. Therefore, reimbursement will not be impacted until March 14 or later. Details of how sequestration will be implemented for Medicare and specifics on how it will impact programs and providers across the country are limited at this time. Updates will be posted to as they become available.

Although Medicare reimbursement will be reduced by 2 percent for the remainder of the year as a result of the sequester, the climate is ripe to permanently fix cardiology's largest recurring threat — the SGR. A recent report on Budget and Economic projections for 2013-2023, released by the Congressional Budget Office, revealed a significant reduction in the cost of repealing the SGR formula. The projection now stands at $138 billion, more than $100 billion below earlier estimates. This estimate, coupled with Congressional committees tackling the subject early in the year, puts us in good shape for SGR action this year, but it remains to be seen how the budget process and sequestration cuts will impact the discussion.

As always, your ACC is committed to fighting for a reformed Medicare physician payment system that ensures stability for physicians and cost-effective quality care for patients nationwide. Stay tuned to the ACC Advocate and for developments on how sequestration will be applied, as well as updates on ways you can take action towards a permanent SGR repeal.

Keywords: Public Health, Medicaid, Health Expenditures, Medicare, United States

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