What Do You Know About Sequestration?

Jamie A. Gregorian. Esq.

Although most of the automatic spending cuts referred to as sequestration went into effect on March 1, and Medicare payment cuts went into effect on April 1, most Americans have not yet felt their impact. As the New York Times put it, “[t]he process of trimming government budgets is slow and cumbersome, involving notifications to unions about temporary furloughs, reductions in overtime pay and cuts in grant financing to state and local programs. Less federal money will, over time, mean fewer government contracts with private companies. Reduced overtime pay for airport security checkpoint officers will make lines longer, eventually.”

For Medicare providers, however, the 2 percent reduction in Medicare payments that went into effect on April 1 may already be having an impact. The Centers for Medicare and Medicaid Services (CMS) estimates that reimbursing Medicare claims at 98 percent of their value will result in $11 billion in lost revenue to Medicare doctors, hospitals, and other providers.

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