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Sequestration
Overview
On March 1, 2013, across-the-board cuts created the by the Budget Control Act of 2011 went into effect. These federal program spending cuts, also known as sequestration, will eliminate $85 million from the national deficit over the next ten years. Sequestration will cut essential family medicine training programs by between 2 percent and 5.1 percent.
Cuts made to the family medicine-focused programs and funding sources will impact family medicine in the following ways:
Medicare Physician Payments
All Medicare payments to physicians will receive a 2 percent cut beginning April 1, 2013. For example, a solo practice receiving $93,575 in Medicare revenue for 2012 would receive $5,643 less in total revenue for 2013. A small group practice receiving $280,500 in Medicare revenue for 2012 would receive $16,929 less in total revenue for 2013.
MEDICARE GRADUATE EDUCATION (GME)
All GME payments will be cut by 2 percent starting April 1. Most likely, major across-the-board reductions in funding to GME will impact the primary care workforce disproportionately. However, the allocation of these funds to residency programs will still be at the discretion of the hospitals and teaching health centers that receive the government funding directly.
Title VII Health Professions Training Programs
The sequester cuts the Title VII Primary Care Training and Enhancement Program by 5 percent. Title 7, Section 747 was allocated $39 million for the 2012 fiscal year, but these cuts will reduce the amount to $37 million for the 2013 fiscal year. This funding reduction will prevent the Health Resources and Service Administration (HRSA) from offering new primary care training grants. Over 2,000 primary care medical students and physician assistant trainees will be adversely affected by the funding loss.
The National Health Service Corps (NHSC)
The NHSC recruits and places medical professionals in Health Professional Shortage Areas to meet the need for health care in rural and medically underserved areas. The sequester will cut the NHSC trust fund by 5.1 percent. HRSA is still in the process of analyzing the impact of the sequestration on NHSC, and will provide updates as more information becomes available. The Affordable Care Act allocates $300 million for NHSC for the 2013 fiscal year.
Agency for Healthcare Research and Quality (AHRQ)
AHRQ’s Center for Primary Care, Prevention, and Clinical Partnerships (CP3) serves as the home for the AHRQ's Practice-Based Research Network of primary care ambulatory practices. AHRQ anticipates that the sequester will reduce their funding by $21.7 million in for the 2013 fiscal year. They will try to protect the core mission activities, but the sequester will impact new grants. Updates will be provided on AHRQ funding and programs as more information is made available.
Learn More
- Read AAFP's FY 2013 Senate Appropriations Testimony.
- Read AAFP's Joint Letter to Congress on Negative Impact of Budget Sequester.
- Read AAFP's One-Pager to Congress Outlining Family Medicine's Sequester Concerns.
- Read ANN article: Sequestration Cuts to Take Effect April 1.
Family Medicine Workforce
AAFP Testimony to the Senate HELP Committee Regarding Primary Care Access (*PDF file)
Graduate Medical Education (GME)
Sequestration
(*PDF file. About PDFs)
