Brac­ing for im­pact

HHS pre­par­ing for se­ques­tra­tion re­duc­tions

Modern Healthcare - - LATE NEWS - Jes­sica Zig­mond

HHS is brac­ing it­self for the au­to­matic fed­eral bud­get cuts set to take ef­fect next week, but it does not have a pro­jec­tion of how many de­part­ment em­ploy­ees will be af­fected by the spend­ing re­duc­tions.

Un­less Congress reaches a bud­get agree­ment by March 1, $85 bil­lion in spend­ing cuts to de­fense and non­de­fense pro­grams will kick in for the re­main­der of the fis­cal year, which ends Sept. 30. Known as se­ques­tra­tion, the bud­get re­duc­tions are part of the $1.2 tril­lion in across-the-board spend­ing cuts to fed­eral pro­grams over 10 years that Congress agreed to in the Bud­get Con­trol Act of 2011.

As part of the Amer­i­can Tax­payer Re­lief Act passed last month, Congress agreed to de­lay se­ques­tra­tion—which was sched­uled to start Jan. 2—un­til March 1. Fed­eral de­part­ments are pre­par­ing for the cuts to hap­pen; ear­lier this week, the De­fense De­part­ment an­nounced plans to fur­lough most of its civil­ian work­force of about 800,000 em­ploy­ees in late April.

“HHS is work­ing to pre­pare for the pos­si­bil­ity of th­ese re­duc­tions in a way that tries to min­i­mize the neg­a­tive im­pacts on HHS’ mis­sion,” an HHS spokesman said in an e-mail. “HHS does not have fi­nal plans or es­ti­mates of the im­pacts on its fed­eral em­ploy­ees at this time.”

HHS Sec­re­tary Kath­leen Se­be­lius sent a let­ter to the Se­nate Ap­pro­pri­a­tions Com­mit­tee this month that de­tailed how se­ques­tra­tion will af­fect so­cial ser­vices, pub­lic health, med­i­cal re­search and health­care cov­er­age for Amer­i­cans. For in­stance, Se­be­lius noted that the Food and Drug Ad­min­is­tra­tion would con­duct about 2,100 fewer domestic and for­eign fa­cil­ity in­spec­tions of firms that make food prod­ucts, which could in­crease the risk of safety in­ci­dents such as food-borne ill­nesses. The cuts would also lead to about 3,000 fewer in­pa­tient ad­mis­sions and 804,000 fewer out­pa­tient vis­its in In­dian Health Ser­vice and tribal hos­pi­tals and clin­ics.

And Se­be­lius high­lighted the an­tic­i­pated 2% pay­ment cut to Medi­care providers, health plans and drug plans, which she said will lead to “bil­lions of dol­lars in lost rev­enues” to Medi­care physi­cians, hos­pi­tals and other providers.

Mean­while, the Na­tional As­so­ci­a­tion of Com­mu­nity Health Cen­ters an­nounced Fri­day that th­ese fa­cil­i­ties face a po­ten­tial loss of about $120 mil­lion through se­ques­tra­tion. Ac­cord­ing to the or­ga­ni­za­tion, those spend­ing re­duc­tions could cause about 900,000 com­mu­nity health cen­ter pa­tients to lose ser­vices and force some cen­ters to close. In a state­ment, Dr. Gary Wiltz, the as­so­ci­a­tion’s board chair elect, said the ar­bi­trary cuts will have a “rip­ple ef­fect.”

“Ev­ery com­mu­nity that a health cen­ter serves will be ad­versely af­fected in some way,” Wiltz said. “Cur­rent pa­tients, many of whom have chronic con­di­tions and need on­go­ing med­i­cal care, may lose ac­cess to the low-cost pri­mary care they know, or low-in­come fam­i­lies who have been wait­ing for a health cen­ter to open in their com­mu­nity might have to wait even longer, or they will just con­tinue to go to the lo­cal emer­gency room for care.”

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