Does sequestration offer a budgetary bright side?

Mar 1 2013

News outlets set the scene for the impact on the health care sector and the Medicare program by the sequester's scheduled cuts, which kick in March 1.

The New York Times: Parties Focus On The Positive As Budget Cuts Draw Near
For weeks, President Obama has barnstormed the country, warning of the dire consequences of the cuts to military readiness, educators, air travel and first responders even as the White House acknowledges that some of the disruptions will take weeks to emerge. The reverse side has gone unmentioned: Some of the most liberal members of Congress see the cuts as a rare opportunity to whittle down Pentagon spending. The poor are already shielded from the worst of the cuts, and the process could take pressure off the Democratic Party, at least in the short run, to tamper with Social Security and Medicare (Weisman, 2/27).

The Associated Press/Washington Post: Senate Democrats And GOP To Stage Votes On Rival Plans To Address Automatic Budget Cuts
Democrats controlling the Senate are pushing a $110 billion plan that would block the cuts through the end of the year. They would carve 5 percent from domestic agencies and 8 percent from the Pentagon but would leave several major programs alone, including Social Security, Medicaid and food stamps, while limiting the cuts to Medicare to a 2 percent reduction to health care providers like doctors and hospitals. … Republicans were sure to kill the Democratic alternative with a filibuster. They were poised to offer an alternative of their own that would give Obama the authority to propose a rewrite to the 2013 budget to redistribute the cuts. Obama would be unable to cut defense by more than the $43 billion reduction that the Pentagon faces and would be unable to raise taxes to undo the cuts (2/28).

Los Angeles Times: 'Sequester' Cuts To Hit Healthcare Hard
As the Obama administration begins to implement $85 billion in cuts to federal spending this year, no part of the budget other than defense will take a bigger hit than healthcare. And the so-called sequester appears likely to have a disproportionate effect on areas of the health system already hobbled by years of retrenchment or underfunding, including public health and medical research (Levey, 2/27).

The Associated Press: No Ruckus About Medicare Cuts In Sequester
Hospitals, doctors and other Medicare providers are on the hook for a 2 percent cut under looming government spending reductions. But they're not raising a ruckus. Why? The pain could be a lot worse if President Barack Obama and congressional Republicans actually did reach a sweeping agreement to reduce federal deficits (Alonso-Zaldivar, 2/27).

Medscape: Medicare Pay To Shrink 2% As Sequester Looms On Friday
Unless a Congressional miracle occurs, Medicare reimbursement for physicians will decrease by 2% as $85 billion worth of automatic, across-the-board budget cuts called sequestration take effect on March 1 for the current fiscal year. Organized medicine is complaining not only about reduced pay, which could push struggling medical practices further into a hole, but also about the deleterious effect of even larger budget cuts in store for federal agencies such as the Centers for Disease Control and Prevention, the US Food and Drug Administration, and the National Institutes of Health (Lowes, 2/27).

CQ Healthbeat: Medicare Fraud Program Faces Sequester Cuts
The impending automatic sequester cuts could harm the progress made by programs battling Medicare fraud and abuse, administration officials said at a House subcommittee hearing. Although spending cuts on Medicare itself are limited to 2 percent under the sequester, programs at the Centers for Medicare and Medicaid Services are subject to larger reductions (Ethridge, 2/27).

Modern Healthcare: Sequester's Medicare Cuts Would Start With Services Provided In April
If sequestration kicks in Friday as planned, the 2% payment reduction to Medicare providers and insurers will be for services provided on or after April 1, an HHS spokesman confirmed Wednesday. When asked if HHS has already alerted providers and insurers about the date of the payment cuts, the spokesman replied in an e-mail, "If sequestration occurs, official notifications will be made." The lack of any notice from HHS left provider groups to wonder when their members will see those reductions. An official for the American Health Care Association-;which represents skilled-nursing facilities and assisted-living providers-;said there has been confusion among the organization's staff and lawyers about when those cuts would take place, while the American Hospital Association, Federation of American Hospitals and National Association of Public Hospitals and Health Systems all anticipated the cuts would begin in April (Daly and Zigmond, 2/27).

The Washington Post: Sequester Spin Gets Ahead Of Reality
State and local governments could also shift money around to blunt the impact on some popular programs such as Meals on Wheels, which delivers food to homebound elderly people and is funded with flexible federal grant money. And some of the scariest scenarios -; say, concerns that the Centers for Disease Control and Prevention, which stands to lose more than $300 million, will not have the resources it needs to spot and contain the next deadly disease outbreak -; are by their nature impossible to quantify. "The threats aren't decreasing," said CDC Director Tom Frieden. "I can't predict when an outbreak is going to happen" (Tumulty and Layton, 2/27).