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 March 1, 2013, the Centers for Medicare & Medicaid Services (CMS) released Change Request 8214, which outlines rules related to the extension of the Low Volume Adjustment (LVA) and Medicare Dependent Hospital (MDH) regulations, as authorized by the American Taxpayer Relief Act of 2012 . The Federal Register notification related to these extensions, CMS 1588-N, was released on March 4, 2013, and officially published March 7, 2013. Hospitals will need to move quickly to take full advantage of the LVA extension, and they may be surprised by some of the requirements of the MDH extension
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.