As previously reported in Rushnotes, all Medicare services provided by physicians will be subject to a 2 percent payment cut under the budget sequestration on April 1. The 2 percent cut will be imposed on the underlying charge, that a participating physician receives from Medicare; coinsurance is not affected. Under current law, the sequester will be in effect for nine years, unless Congress and the White House are able to reach a significant deficit reduction agreement that replaces it.  Preliminary agreement discussions are being held between the Senate and White House. However, the likelihood of a swift resolution is small.

Sequester Effects on Other Federal Spending:

• Beginning midnight, March 28, 3 to 5 percent reductions in FY13 spending will be taken from non-defense discretionary programs (NDD) . However, these 3 to 5 percent reductions are being squeezed into six months, meaning the actual drops in funding for the second half of FY13 are in the 6 to 10 percent range.    

• Federal agencies are required to submit their reductions in spending plans to Congress within the next 23 days. Once the plans are released we will have actual data on the funding cuts in grant support and staff from other agencies.    

• National Institute of health is currently the only health-related federal agency to announce its sequester plan. The NIH did so in the autumn of 2012 by stating that they were funding awarded grants and activities at 90 percent. NIH Director, Francis Collins, M.D., was adamant that inconsistent funding of scientific inquiry hurts biomedical research and was determined to minimize interruptions in funding. To that end, those affected knew to expect the reduction and to plan for the reduction. NIH does not anticipate furloughs at this time.

Representative Tom Price, M.D. (R-GA), an orthopedic surgeon who sits on the powerful House Ways and Means Subcommittee on Health, has reintroduced legislation that would help to preserve the patient-physician relationship by allowing seniors to continue to use their Medicare benefit, even with physicians who do not accept Medicare patients. H.R. 1310, the Medicare Patient Empowerment Act, would allow patients and physicians to contract freely with each other for Medicare services, while allowing Medicare patients to use their Medicare benefits and allowing physicians to bill patients for an amount not covered by the benefit (with the exception of emergency situations and treating Medicare/Medicaid 'dual eligible' beneficiaries). The Medicare Patient Empowerment Act promises to strengthen a patient's freedom and access to comprehensive healthcare which current problems, such as the flawed SGR, threaten to disrupt.