Health care providers and patient advocates are anxious over pending cuts to federal health programs next year if Democrats and Republicans can't strike a deal on budget cuts and taxes by Dec. 31.
Unless Congress can agree on at least $1.2 trillion in program cuts, wide-ranging reductions in domestic and defense spending, known as "sequestration," will begin Jan. 2.
Some services are exempt, such as veterans' health programs, Medicaid and the Children's Health Insurance Program. Funding for the main provisions of the 2010 health care law doesn't begin until 2014, so it also wouldn't be affected by the 2013 sequester.
But money for crucial services such as community health centers, HIV and AIDS programming, bio-medical research, disease control and prevention, and the regulation of food, drugs and medical devices would face reductions of 8.2 percent beginning next year if Congress and the White House fail to reach a compromise.
Although similar sequester scares have been averted after serious negotiations, Tim Westmoreland, a law professor at the Georgetown University Law Center, wasn't optimistic.
"This doomsday machine is going to go off this time," said Westmoreland, who headed the Medicaid program in the final years of the Clinton administration.
If he's right and President Barack Obama issues a sequester order on Jan. 2, Medicare would impose a 2 percent cut on payments to providers and insurers a month later.
Monthly payments to Medicare prescription-drug plans and Medicare Advantage plans - the private plans that provide Medicare benefits - also would face a 2 percent reduction, said Lisa Potetz, a principal with Health Policy Alternatives, a private consulting firm.
Medicare administrative spending would be subject to the same 8.2 percent cuts faced by most other non-defense agencies, as well, Potetz added.
In September, the Office of Management and Budget estimated that the reductions would take $11.6 billion from Medicare's budget in 2013. The cuts would total $99 billion if the sequester were in effect for the full nine years as current law provides, according to the Congressional Budget Office.
That's far less than the 10-year, $400 billion reduction in the program that Obama envisions as part of his new proposal to avert sequestration. But an $11.6 billion funding cut would have serious consequences nonetheless.
While benefits wouldn't be cut directly, the impact of reductions in revenue to health care providers and their effects on beneficiaries are unclear. Some worry that the 2 percent cut might lead doctors to shun Medicare patients.
That possibility that would only increase if Congress fails to prevent a separate 27 percent cut in Medicare physician-payment rates that's scheduled to take effect Jan. 1.
Congressional action has prevented this rate reduction, triggered by Medicare's inability to meet its targeted expenditures, for the last 11 years, and it's almost certain to be skirted again for 2013.
Nevertheless, Potetz said it only added to the pressure lawmakers faced to strike a "fiscal cliff" deal early in order to avoid any disruptions in payments to Medicare providers.
"It's in everybody's interest, if it's going to be fixed, to fix it as soon as possible," she said.
A study commissioned by the American Medical Association, the American Hospital Association and the American Nurses Association estimates that nearly 500,000 jobs would be lost or not created in 2013 if the 2 percent sequester cuts for Medicare go through.
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