How Does Sequestration Impact ASC Medicare Reimbursement?

Question: How will the 2 percent Medicare payment reduction as a result of sequestration impact ambulatory surgery centers?

Scott Becker, JD, Partner at McGuireWoods: The government reduction in spending through the sequester has direct and indirect impacts on surgery centers. First, through its direct reduction in spending it should translate into a 2 percent reduction on a surgery center's Medicare revenues. For example, if an ASC, has 50 percent of its revenues through Medicare and those amount to $3,000,000, then the ASC would suffer a loss of $60,000 a year. This is approximate and doesn't take into account any impact on co insurance or on Medicaid. Second, in addition to the reduction in direct payments, the sequester adds another headwind to an already fragile economy. When you couple this 2 percent reduction with the increased taxes as of January 1, it amounts to close to 4 to 5 percent taken out of the private economy. This combined with already tepid growth rates will cause more caution in consumer spending and more delay in a great deal of surgical procedures.

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