Medicare cuts likely to come March 1

Providers face another fiscal cliff. In only a few weeks, automatic budget cuts are set to go into effect unless Congress acts to delay or permanently fix the mandated sequestration cuts. On March 1, Medicare will reduce reimbursements by 2 percent, ending the two-month extension and temporary relief providers got from the New Year deal.

But according to reports, this is one fiscal cliff that Congress may go over. Though Congress and Obama didn't intend to implement the reductions agreed on in 2011, pundits content the cuts will go into effect anyway, the Los Angeles Times reported.

Some GOP members say they would rather see the automatic cuts than another short-term fix.

"You're going to feel it," said Steve Bell, senior director of economic policy at the Bipartisan Policy Center in Washington. "There's no way there can't be a slowdown [in government services]. You're going to see it at a local level."

Obama last week signaled the White House's commitment to resolving the sequestration issue.

Although Congress has discussed options to reduce spending, politicians are sharply divided on how to do it, the LA Times noted.

The answer shouldn't be tax increases, House Majority Leader Eric Cantor (R-Va.) said Sunday on Meet the Press.

House Minority Leader Nancy Pelosi (D-Calif.), meanwhile, said she and other House Democrats oppose raising the eligibility age for Medicare recipients from 65 to 67--another discussed measure to curb federal spending, Politico reported.

Although the 2 percent Medicare cuts sound like small change, hospitals are worried that coupled with a separate looming 25 percent cut, as well disproportionate share hospital (DSH) adjustments, providers will be paralyzed with cumulative reimbursement reductions.  

For more information:
- read the LA Times article
- watch the Meet the Press video
- read the Politico article

Related Articles:
Is there any hope for the Medicare system?
House introduces to fix Medicare cuts for good
New Congress renews efforts to repeal SGR
MedPAC pushes SGR repeal, but few pay changes
Fiscal cliff law shifts Medicare cuts to hospitals
Congress approves last-minute 'doc fix'