Healthcare Business News

Sequester's Medicare cuts would start with services provided in April

By Rich Daly and Jessica Zigmond
Posted: February 27, 2013 - 7:00 pm ET

If sequestration kicks in Friday as planned, the 2% payment reduction to Medicare providers and insurers will be for services provided on or after April 1, an HHS spokesman confirmed Wednesday.

When asked if HHS has already alerted providers and insurers about the date of the payment cuts, the spokesman replied in an e-mail, “If sequestration occurs, official notifications will be made.”

The lack of any notice from HHS left provider groups to wonder when their members will see those reductions. An official for the American Health Care Association—which represents skilled-nursing facilities and assisted-living providers—said there has been confusion among the organization's staff and lawyers about when those cuts would take place, while the American Hospital Association, Federation of American Hospitals and National Association of Public Hospitals and Health Systems all anticipated the cuts would begin in April.

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“That was an extrapolation from the January extension,” said Shawn Gremminger, an NAPH lobbyist, about the two-month delay to the start of the sequester approved in a Jan. 2 budget deal.

Legislation that created the sequester specified that it cut Medicare reimbursements for services provided the month after the sequester's start, which was originally scheduled for Jan. 2. Providers are expected to see the cuts show up in their Medicare reimbursements sometime around mid-April—depending on the time the CMS typically takes to process their payments.

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