Sequestration Cuts to Take Effect April 1

The AAFP is "dismayed and disappointed" that Congress and the White House allowed across-the-board sequestration cuts to take effect as a result of the Budget Control Act. "Such an approach to fiscal planning is short-sighted and detrimental to the nation's ultimate goals for high-quality, affordable patient care," said AAFP President Jeff Cain, M.D., of Denver, in a prepared statement.

"If Congress hopes to improve the quality of care and rein in its costs, the blunt force of sequestration is not the tool to use," said Cain. "Not only does it fail to produce targeted improvements in efficiency, but it threatens the programs that do work to meet these goals."

The Academy has repeatedly urged Congress and the administration to fix the sequestration problem before it took effect, calling on members to contact their legislators and working with a variety of other physician organizations to find a solution to sequestration.

Although the actual sequestration cuts are not scheduled to take effect until April 1, if enacted, they will result in a 2 percent reduction in the Medicare physician payment rate and additional cuts of more than 7 percent in programs that are vital to producing family physicians (1-page PDF; About PDFs), including graduate medical education programs.

"Cuts to graduate medical education funding will have a disproportionately negative impact on primary care physician residency training as teaching hospitals shift their limited number of training positions from primary care to more lucrative subspecialties," said Cain.

In addressing the Medicare cuts, Cain said the sequestration "will slash thousands of dollars from family physicians' practice revenue," and that Medicare payment reductions will have a domino effect, leading to cuts in private sector payments because private insurers base their rates on Medicare rates.

"As small businesses operating on a razor-thin margin, family physicians will face a stark choice between putting their practices at risk or reducing the number of elderly and disabled patients they can see," said Cain. "Rather than rein in costs, sequestration payment cuts to health care providers will reduce access to needed care, increase the risk that preventable health conditions will develop or will worsen, and increase the chance that patients will ultimately require more intensive and expensive care."

At the same time, the cuts likely will encourage other providers to shift costs to private payers or patients, Cain said.

Cain also said the impending reductions perpetuate an already broken health care system by threatening progress toward improving care and reducing costs.