With the stalemate between President Obama and Republican leaders over a deal to replace the wide-ranging federal spending cuts known as sequestration continuing at presstime, the health care sector was bracing for reductions that will impact providers and patients alike.


sequestration, federal spending cuts, pharmacy, health care sector, President Obama, Republican leaders, Medicaid, Medicare payments, Part B drugs, Part D plans, Tricare, Jeremy Lazarus, American Medical Association, Gary Wiltz, National Association of Community Health Centers






































































































































































































































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Inside This Issue - News

Pharmacy hit by sequestration

March 18th, 2013

WASHINGTON – With the stalemate between President Obama and Republican leaders over a deal to replace the wide-ranging federal spending cuts known as sequestration continuing at presstime, the health care sector was bracing for reductions that will impact providers and patients alike.

In areas related to pharmacy, Medicaid should not be impacted, but Medicare payments, including for Part B drugs, immunizations and Part D plans, are being cut by 2%. Increased pressure is also seen for the Tricare program, since the Department of Defense is subject to an estimated $52 billion in reductions through the rest of the year.

Elsewhere in health care, physicians treating Medicare patients, for example, should anticipate a 2% pay cut effective April 1 under the $85 billion federal budget sequester, according to the Centers for Medicare and Medicaid Services. Some published reports predict that the sequester reductions will result in $11 billion in lost revenues to Medicare doctors, hospitals and other providers.

Dr. Jeremy Lazarus, president of the American Medical Association, said in a news release that the cuts will hit physicians particularly hard because of what he calls a fundamentally flawed Medicare physician payment system.

“Since 2001 Medicare payments for physician services have only increased by 4%, while the cost of caring for patients has gone up by more than 20%,” Lazarus said. “A 2% cut widens the already enormous gap between what Medicare pays and the actual cost of caring for seniors.”

The cuts threaten access to care for patients, slow innovation and increase dysfunction within the Medicare program, he added. “Further cuts are counterproductive and stifle important progress while placing an unsustainable burden on physician practices.”

The sequester would not affect Medicaid, the joint federal-state health program for the poor.

However, other health care initiatives are among government programs that face reductions of about 9%, according to the Office of Management and Budget. The full impact likely won’t be felt for weeks as the cuts roll out.

Dr. Gary Wiltz, chairman-elect of the board of the National Association of Community Health Centers, one of the groups facing those cuts, said the reduced federal funding will cause the centers to curtail services dramatically. He estimates that as many as 900,000 patients could be turned away from care. “Many of them cannot afford to go anyplace else,” he said.

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