Budget Sequestration Takes Effect, Cuts to Medicare Pay, EHR Incentives Expected April 1

February 25, 2013

Following last month’s breakdown of fiscal negotiations between the White House and leaders in Congress, the government-wide budget sequestration went into effect March 1.

As a result, Medicare physicians, including optometrists, are bracing for a two-percent reduction in payments alongside other cuts to domestic and defense programs as originally envisioned under a 2011 deficit-reduction law.

While cuts to most programs are now being implemented, an anomaly in the original legislation means that the sequester’s Medicare physician payment reduction will not begin until April 1, an earlier assertion made by AOA and recently confirmed by the Centers for Medicare & Medicaid Services (CMS).

At the same time, CMS officials have also confirmed that the April 1 two-percent reduction will be applied to many other Medicare functions as well, such as the incentive program for meaningful use of electronic health records.

CMS has indicated that the reduction will affect any Medicare EHR incentive payment made by the agency on or after April 1. Though, the agency has also noted that Medicaid payments are exempt from sequestrations and, as a result, Medicaid EHR incentive payments will not be reduced.

Optometry has and will continue to urge Congress and the Administration to find a workable solution, though the AOA and others remain wary of potential alternatives to the sequester which could undo the two-percent cap on Medicare physician payment cuts and leave open the possibility of even larger reductions.

Earlier this year, at the urging of the AOA and other physician groups, President Obama and lawmakers agreed to a bipartisan plan to delay a separate 30 percent Medicare cut until 2014. At this time, though, the White House and Capitol Hill leaders appear willing to allow the government-wide sequester cuts to continue to be implemented.

With funding for government operations set to expire toward the end of March, the AOA will use the next few weeks to keep up pressure on the White House and leaders in Congress to address these and other Medicare issues.

Concerned ODs should monitor the AOA News blog for the latest news and information on this important topic. AOA members with questions or concerns should contact the AOA Washington office at 800-3645-2219 or ImpactWashingtonDC@aoa.org

One comment

  1. […] Budget sequestration targets Medicare physician pay […]

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