Healthcare Business News

Lawmaker expects deal averting 2% Medicare cut

By Rich Daly
Posted: December 19, 2012 - 2:30 pm ET

Congress is likely to eliminate a looming 2% cut to Medicare providers, but it might be done retroactively, according to a senior Senate Democrat.

“I'm still optimistic there is going to be an agreement; if not right before the end of the year, then right after,” Sen. Kent Conrad (D-N.D.), chairman of the Budget Committee, said in a Wednesday interview.

The across-the-board cut to Medicare providers and insurers, which is slated to take effect in 2013, was required by the Budget Control Act as part of $1.2 trillion in 10-year spending reductions.

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Conrad warned that the Medicare sequester “may go into effect for a short period” before it is stopped as part of a large debt-reduction package.

The Congressional Budget Office has estimated that the law would cut $10.7 billion from Medicare in 2013 and increase to $16.4 billion in cuts by 2021.

The latest budget deal offered by House Speaker John Boehner (R-Ohio), which the House of Representatives is expected to consider Thursday, did not include elimination of the sequester. It was unclear whether President Barack Obama's preceding offer addressed the sequester.

Although provider advocates have consistently warned that the Medicare sequester cuts could impact the availability of care for Medicare beneficiaries, Conrad downplayed any beneficiary impacts. However, he emphasized the short-term stimulus effect of avoiding the overall sequester cuts.

Conrad praised the as-yet-unspecified $400 billion in healthcare cuts included in the latest deficit-reduction deal offered by the White House because healthcare spending is “the place where we are having the biggest growth in spending.”

“There is a chance in healthcare for savings without hurting the care provided to beneficiaries,” Conrad said.

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