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Medicare Payments to Providers Are Carved, Sliced and Chopped by Sequestration

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2% Sequestration Cuts Take a Big Bite Out Of Medicare Reimbursements



2% Sequestration Cuts Take a Big Bite Out Of Medicare Reimbursements


MedicareCARVED – Sequestration is defined as taking legal possession of assets until a debt has been paid off (Merriam Webster). The federal government is automatically cutting the federal budget by slicing Medicare reimbursements by 2%.

On January 1st of this year, sequestration was supposed to go into effect. However, the U.S. Congress passed P.L. 112-240 “American Tax Relief Act of 2013″ (aka fiscal cliff) delaying the start of sequestration until March 1st.



How will sequestration affect healthcare?

  • Physicians who see Medicare patients will see an automatic 2% reduction in their reimbursement beginning April 1st
  • Claims for DME (durable medical equipment), including claims under DME Competitive Bidding program will be reduced by 2%
  • Medicare’s payment to beneficiaries for unassigned claims are subject to the 2% reduction
  • All services and programs within Medicare (all provider services, hospitals, Medicare Advantage plans, graduate medical education) will see a 2% reduction
  • EMR “meaningful use” incentive payments to be cut by 2%


SLICED – Below you will find several examples of how sequestration will slice State Health Departments budgets:

California   – $2,621,000 cut from public health programs
Texas   –  $2,402,000 cut from public health programs
Georgia  –  $925,000 cut from public health programs
Florida  –  $1,796,000 cut from public health programs
New York  –  $1,070,000 cut from public health programs

A total of $28,455,000 will be cut from public state health programs. 

MedicareCHOPPED – Sequestration will have a huge impact on healthcare chopping up reimbursements. Now more than ever before, providers must look for every dollar of reimbursement they can find. In most cases, the low-hanging fruit has already been picked. Today, forward thinking healthcare executives must move quickly to make the decisions which will positively affect reimbursements. Investments in brand new technologies and reinvented processes, which offer an ROI of less than 12 months will be the most attractive moves executives can make. There are several “Blue Diamond” technologies entering the marketplace every day. These new avenues for reimbursement recovery are available to help offset the reimbursements that has been carved up, sliced off and hacked to pieces by sequestration.



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