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Sequestration to Impact Health Care-Related Programs

Sequestration to Impact Health Care-Related Programs

Medicare providers and medical researchers brace for cuts from fiscal impasse

FRIDAY, March 1 (HealthDay News) -- The $85 billion of mandatory cuts in federal spending that take effect March 1 as part of sequestration will be felt across health care and related programs, with cuts to Medicare providers and to the budgets of federal agencies.

The Medicaid program will be unaffected by the cuts but Medicare providers will receive 2 percent cuts for services provided, which will total an estimated $11 billion for the year. While this is less of a decrease than most nondefense programs will experience, a noticeable impact is expected for physicians with a high percentage of Medicare patients in their practice. Experts say though, that this may only just be the beginning. As Congress and President Barack Obama negotiate a comprehensive deficit reduction bill and the next fiscal budget that goes into effect Oct. 1, substantial cuts to the Medicare and Medicaid programs are likely.

Other health-related agencies, including the U.S. Centers for Disease Control and Prevention, the U.S. Food and Drug Administration, the National Institutes of Health, and the National Science Foundation, are preparing for budget cuts of approximately 5 percent resulting from the March 1 sequestration. Agency officials say that the funding cuts could lengthen FDA reviews of new drugs and medical devices, curtail CDC immunization and infection control services, and delay research funding and potentially slowdown ongoing medical research. Congressional Republicans question the severity of the impacts outlined by the Obama administration.

"A 2 percent cut would only widen this already enormous gap between what Medicare pays and the cost of providing care to seniors," said Jeremy Lazarus, M.D., president of the American Medical Association.

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