According to the American Medical Association, sequestration will cut physician Medicare payments cuts by 2 percent. Without further action, the Medicare payment cuts will take effect on April 1.
At this time, It is not known whether the cuts will be applied to services provided after March 30, or to claims submitted after March 30 regardless of the date of service.
An additional threat to federal funding is the pending expiration of Congress' Continuing Resolution. Unless Congress extends this Continuing Resolution beyond March 27, the federal government will have no spending authority and could shut operations.
Two areas of health care exempted from cuts: Medicaid, and Medicare beneficiaries. Read the MMS statement on the start of sequestration.
Cuts to Federal Health Care Programs
The targeted cuts imposed by the sequestration process will impact programs throughout the health care system. The following estimates of the impact of reduced federal funding were produced by the White House and a report from U.S. Rep. Edward Markey of Massachusetts. (Both reports are in .pdf format.)
National Institutes of Health: At $2.5 billion annually, NIH funding is a critical component of the Massachusetts life sciences and health care sectors, supporting more than 35,000 jobs. The funds support research in universities, public and private research organizations, and private companies. Only one state had more NIH funding last year than Massachusetts. Boston has led the nation's cities in NIH funding for 17 consecutive years. In FY 2011, Boston brought in $1.7 billion through 3,600 NIH grants. Expected sequestration cut: $127 million (5.1%).
Congressionally Directed Medical Research: This medical research program with the Defense Department provided $38.6 million in funding in FY 2011. Eighty-five percent of this funding ($32.8 million) supported research in Massachusetts hospitals and medical schools. Expected sequestration cut: $2.5 million (6.4%).
Pediatric Vaccines: The White House estimates that pediatric vaccines for measles, mumps, rubella, tetanus, whooping cough, influenza and Hepatitis B will be cut by $201,000, affecting 2,940 children.
Preparedness: The White House estimates that $625,000 will be cut from programs to support Massachusetts' response to public health threats as infectious disease, natural disasters, and biological, chemical, nuclear, and radiological events.
Substance Abuse: Sequestration would cut $1.7 million from substance abuse program funding, resulting in 5,200 fewer admissions to substance abuse programs.
HIV Testing: The Massachusetts Department of Public Health stands to lose $367,000 in funding for HIV testing, resulting in 9,200 fewer HIV tests.
