Sequestration – What does it mean?

Date Published: March 7th, 2013
Blog Category: Medicare

Sequestration went into effect on March 1st, 2013 due to the Budget Control Act of 2011. The act states if new legislation addressing the federal budget deficit was not enacted by January 2013, across-the-board cuts would go into effect. Sequestration is just a term used to describe these mandatory, indiscriminate cuts in spending.  The intent of the Budget Control Act was to force congress to find some creative, long-term alternatives for meeting budget goals. Congress did not come up with a solution before the deadline.  Keep in mind that congress can act at any time to find a different solution or amendments to this process.

Sequestration impacts a wide range of federal programs and almost all government agencies, including the Centers for Medicare & Medicaid Services (CMS). Cuts in Medicare reimbursements to providers will be capped at 2% each year (2013-2021). These cuts begin with services rendered after April 1st, 2013.

In summary, your medical providers will be paid less for offering the same services, Medicare patient rates will remain the same, and the cost of providing care will continue to rise.

A recent Gallup survey shows that most American’s don’t know how they feel about sequestration. What do you think?