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What is Medicare sequestration?
Just the Essentials...
Overall, Medicare sequestration reduces government spending to meet budgetary goals.
Essentially, sequestration reduces what Medicare pays its providers for health services by two percent.
However, Medicare beneficiaries bear no responsibility for the cost difference.
While aimed to prevent further debt, it imposes financially on hospitals, physicians, and other healthcare providers.
When it comes to Medicare sequestration, defining a sequester and how it applies to Medicare should come first.
According to the Congressional Research Service, sequestration is a reduction in federal spending by a certain percentage. As this applies to Medicare, the reduction in federal spending means providers receive less payment for services, specifically by two percent.
Important to note is that beneficiaries do not pay this extra two percent Medicare sequester.
Rather, the healthcare providers themselves bear the added financial burden.
Sequestration officially began in the US on April 1, 2013. However, Congress more recently suspended the Medicare sequester starting April of 2020 through December 31, 2021.
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How Medicare Sequestration Affects Physicians
As a medical fee-for-service program, Medicare pays its providers specific rates for specific services. However, payments to physicians reduce by 2 percent.