With Congress currently at a standstill, it seems increasingly likely that $85 billion in automatic, across-the-board cuts to government spending will be triggered on Friday. The cuts, known as sequestration, are set to begin March 1 unless Congress intervenes. If the cuts are applied, physicians, hospitals and other providers will see 2 percent reductions to their Medicare payments in early April. The 2 percent Medicare provider cuts are part of broader cuts required under the Budget Control Act of 2011, which will dramatically reduce domestic and defense spending to eliminate a total of $1.2 trillion from the federal budget over the next decade.

Many details of the Medicare sequester are still unknown as the Department of Health and Human Services has yet to release an explanation of how it plans to implement the required Medicare payment cuts if necessary. Members should begin to consider necessary contingencies for their practices to absorb a 2 percent Medicare cut.

MGMA is strongly advocating that Congress stop the constant threat of Medicare payment cuts resulting from both sequestration and SGR. To learn what practice executives need to know about sequestration please see our recent article. Additionally, we will keep members apprised of this vital issue through the Washington Connexion.

Original Article posted Feb 27,2013 MGMA Washington Connexion