“We're pleased that they are eliminating the 2% Medicare cut,” said Marie Watteau, a spokeswoman for the American Hospital Association. “We are also pleased they have identified other sources of funding than additional cuts to Medicare and Medicaid.”
Health insurers are worried that the sequester's 2% cuts to the Medicare Advantage program will compound the effect of $200 billion in coming cuts to those plans already authorized under provisions of the Patients Protection and Affordable Care Act, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans.
The sequester already was delayed once by a year-end budget deal. The American Taxpayer Relief Act of 2012 put off the start of the sequester by two months and reduced the total cut to federal spending in 2013 to $85 billion from $109 billion.
Ken Perez, director of healthcare policy at MedeAnalytics, said applying a similar 22% decrease to the Medicare components indicates the program will face about $9 billion in cuts this year.
“We estimate that Medicare Part A would be cut by roughly $4.5 billion, and depending on how that cut is apportioned between hospitals, skilled nursing facilities and other providers, for the remainder of this year this could translate into a reimbursement cut of $0.8 million to $1.3 million for the average hospital,” Perez said. “Medicare Part B reimbursements could be reduced by as much as $4.1 billion, and depending on how that reduction is apportioned between physicians, the Hospital Outpatient Prospective Payment System and other providers, this could translate into a 3 to 4% reduction to the Physician Fee Schedule.”