Sequestration 2.0 likely to take another bite out of provider payments

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John O'Connor
John O'Connor

For many long-term care providers, dealing with funding cuts that began in March has amounted to making the best of a bad situation. Automatic sequestration cuts are trimming Medicare payments by 2%, while many complementary programs are being held back or halted.

That's the bad news. The really bad news is that things are likely to get worse. Thanks to pending sequestration cuts that are beginning to look all but inevitable, more cuts may be coming.

Earlier this week, the House Appropriations Committee approved top-line figures for a dozen 2014 appropriations bills. These are so out of whack with what's happening in the Senate that reconciliation already appears highly unlikely.

And unless the White House and Congress can reach a so-called grand bargain on the deficit, Congress may have no other option than to put most spending on autopilot, courtesy of continuing resolutions.

Currently, the government is operating under a continuing resolution that tops out at $1.043 trillion. But the Budget Control Act would trim that by $76 billion for fiscal 2014, which begins Oct. 1.

Ironically, efforts to address the problem could be undercut by an improving overall economy and new tax revenue. These developments will likely push back the time by which Congress will have to lift the debt ceiling to November. As a practical matter, that means it is highly unlikely that grand bargain talks will even get started before this fall.

Yes, it is possible responsible leaders from both sides will set aside petty differences aside and finally end this ongoing fiscal kabuki dance. But that's a long shot. A far more likely scenario is that additional reimbursement cuts are coming your way.


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Daily Editors' Notes

McKnight's Daily Editor's Notes features commentary on the latest in long-term care news. Entries are written by Editorial Director John O'Connor on Monday and Friday; Staff Writer Tim Mullaney on Tuesday, Editor James M. Berklan on Wednesday and Senior Editor Elizabeth Newman on Thursday.

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