As a result of the Budget Control Act of 2011 , mandatory federal spending cuts, commonly known as “sequestration,” are required. This law is expected to generate spending cuts of $109 billion in the first year and $1.2 trillion through 2021. Sequestration was originally expected to begin January 2, 2013, but was postponed for two months through the American Taxpayer Relief Act of 2012 , passed on December 31, 2012.
On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 , which the president has signed. The act delays sequestration for two months, but assumes the remaining sequestration will resume on March 1, 2013. This means that, for two months, health care providers have avoided the 2 percent cuts in Medicare payments scheduled to take place January 1.
The debt limit crisis was resolved with the enactment of the Budget Control Act of 2011 . The good news for Medicare providers is there are no immediate cuts to provider payment. In a best-case scenario, there may not be any in the longer term, either, but the bad news is such cuts are more likely than not to occur.