Friday, March 8, 2013

Sequestration Update

It Happened…
Our last blog warned of the possibility that the “Sequester” was going to hit. If you missed that blog, we provided you with information about the government sequester which, at that point, was still being debated in a standoff between Congress and The White House.

Well, March came in like a lion where Medicare is concerned, and the sequester is in place. What was supposed to be a rider to a bill in 2011 to incentivize the “Supercommittee” to make cuts, has now come back to haunt all involved, as no one ever expected we’d get to this point without an alternative plan of action.

Effective April 1st
The law that puts the sequester in place calls for any cuts to begin exactly one month from the day that the sequester order hits. The effective date was March 1, 2013, which means that the Feds have one month to make the cuts and the order will begin to take effect on April 1, 2013.

The cuts amount to 2% off of the current payment rate. That cut is 2% less than the ambulance industry is receiving in Medicare payments right now based on the brand new 2013 Medicare National Ambulance Fee Schedule.

The blow is a bit less, though, when comparing numbers against last year as the industry gained 0.8% from the annual Ambulance Inflation Factor when the New Year was ushered in. Therefore, the net effect of the sequester cuts is 1.2% less than we were receiving from Medicare reimbursements last year at this time.

Two Opportunities for Reversal?
There may just be a glimmer of hope for retroactive reversal of the sequester order. Although the hope is slim, there is still a chance for the cuts to be debated with two upcoming milestones.

The first chance for the cuts being stayed will come as Congress and the President spar over the budget, which must be approved to avert a government shutdown due to lack of financing by March 27th. It is possible that compromise legislation could come as part of a bill that will prevent a looming government shutdown.

After that, the next big period of potential brinkmanship action could see the sequestration order reversed as part of legislation to raise the debt ceiling. By May 19th, our nation’s debt will max out to the ceiling of $16.694 trillion that was set by the Budget Control Act of 2011,  passed in August 2011: the bill that ushered in sequestration in the first place.

In order to avoid defaulting on our national debt, Congress must take up the question of raising this ceiling to accommodate continued deficit spending. Ambulance industry watchdogs are hoping that the subject of reversing the effects of the sequestration may come up again when that debate plays out, should there not be a reversal before that.

Realistically…
Realistically, we’ve reached that point where we must consider that ambulance payments from Medicare are just a very small blip on the radar screen in the larger scope of these crisis showdowns. Our Federal Government has become a government that repeatedly functions crisis-to-crisis and ambulance payments are simply caught up with the tide.

However, those of us who watch the trends grow increasingly concerned with the overall negative affect all these larger issues are having on EMS bottom lines across the United States.

Monitoring
Enhanced Management Services continues to monitor the changing fiscal tide on your behalf. Our clients know that we are tuned into all the latest news on any subject that has an impact on your cash flow. Not an Enhanced client? Maybe it’s time to tap into our knowledge and resources on a regular basis. Check us out at www.enhancedms.com or e-mail me at chumphrey@enhancedms.com today so we can chat about how your department can give us a try.
Post a Comment