Official: Sequestration To Affect Medicare EHR Incentive Payments

Hospitals that participate in the Medicare portion of the federal electronic health record incentive payment program could lose thousands of dollars in payments as a result of the 2% cut to Medicare reimbursements under sequestration, according to a federal official, Modern Healthcare reports (Conn/Zigmond, Modern Healthcare, 3/5).

On Friday, President Obama signed an order to initiate $85 billion in spending cuts for the fiscal year ending on Sept. 30. The mandated cuts are the first installment of nearly $1 trillion in across-the-board reductions under sequestration (California Healthline, 3/5).

Under the 2009 federal economic stimulus package, health care providers who demonstrate meaningful use of certified EHR systems can qualify for Medicaid and Medicare incentive payments. Most hospitals participate in both the Medicare and Medicaid portions of the incentive payment program.

However, a CMS report lists 181 hospitals that participate only in the Medicare part of the program. Those hospitals have received an average of $1.87 million each in incentive payments.

According to Modern Healthcare, that means those hospitals stand to lose about $37,500 in payments as a result of the 2% cut to Medicare reimbursements under sequestration. Meanwhile, the top incentive payment for physicians and other eligible professionals participating in the Medicare portion of the meaningful use program is $18,000, which means they would lose $360.

Medicaid EHR incentive payments will not be affected by the sequester (Modern Healthcare, 3/5).

IRS Will Continue Plans To Collect Taxes Under ACA

The sequester's across-the-board spending cuts will not affect the Internal Revenue Service's ability to collect new taxes and fees created under the Affordable Care Act, The Hill's "On The Money" reports (Becker/Baker, "On The Money," The Hill, 3/6).

The ACA, which was signed into law by Obama in 2010, contains more than 40 tax changes, including penalties on individuals who do not purchase health coverage. The IRS also is charged with administering tax credits to the estimated 15 million individuals who are expected to qualify for federal subsidies to purchase coverage through the law's health insurance exchanges.

Neither the IRS nor Department of Treasury officials have commented on how the sequester cuts will affect ACA implementation, according to "On The Money."

Chris Condeluci, a former tax counsel for Senate Finance Committee Republicans, said, "Their silence with regard to the sequester indicates that they won't let anything get in the way of implementation, sequestration or otherwise." He added, "ACA implementation is a priority" ("On The Money," The Hill, 3/6).

House Republicans Seek To Eliminate ACA Birth Control Coverage Requirement in Continuing Resolution

In related budget news, a group of House Republicans wrote a letter to GOP leaders urging them to seek a repeal of the ACA's contraceptive coverage requirement as part of a continuing resolution to keep the federal government funded through September, The Hill's "Healthwatch" reports.

Under the ACA, most employers are required to offer no-cost contraceptive coverage in their employees' health plans. The law exempts churches and houses of worship from the requirement but requires religiously affiliated employers' insurance companies to cover the costs.

In the letter, Rep. Diane Black (R-Tenn.) and other GOP lawmakers wrote, "Congress cannot ignore the relentless assault on the First Amendment right to religious freedom and must act before the [ACA] provisions are fully enacted in August of this year" (Baker, "Healthwatch," The Hill, 3/5).