2% Medicare Cuts Now a Reality

Unable to take advantage of a one-month delay to stave off Medicare sequestration cuts, providers will see an automatic 2 percent reduction in Medicare reimbursement which began on April 1st. The White House estimates the cuts could cost providers $11 billion in Medicare payments a year.

With reduced Medicare payments coming in, some providers will halt their adoption of health IT because they can no longer afford a new or upgraded electronic health record system. Monday’s Medicare sequestration cuts also could then deal a painful blow to the Meaningful Use incentive program. Sequester cuts will take a $3 million bite from the $60 million annual budget of the Office of the National Coordinator for Health IT.

Although across-the-board sequester budget cuts began on March 1, federal agencies are still calculating and implementing those cuts. The Office for Civil Rights, the unit within the U.S. Department of Health & Human Services responsible for HIPAA enforcement, has yet to determine the impact on its budget.   

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