Health providers could be hit with $11 billion in Medicare cuts next year, White House warns

Health providers are in danger of being stuck with $11 billion in Medicare cuts beginning in January when automatic federal spending cuts are due to take effect, the White House warned in a

Providers would see a 2% across-the-board cut to Medicare reimbursements, though beneficiaries would see no reduction in their benefits, Kaiser Health News reported.

The automatic Medicare reimbursement cuts were included in a deal that Congress and President Obama agreed to last year to raise the federal debt limit. The deal calls for $120 billion in automatic cuts to federal spending, a process labeled “sequestration.”

In a 394-page report, the White House described the cuts as “deeply destructive to national security, domestic investments and core government functions,” Politico reported.

Top officials from both parties have said they want to avoid sequestration, but it’s unclear if they’ll be able to reach an agreement to stave off the cuts, part of what's popularly known as the "fiscal cliff."

“The Administration strongly believes that sequestration is bad policy, and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package,” the report stated.

In the healthcare industry, the effects of sequestration would ripple beyond Medicare reimbursements. The National Institutes of Health “would have to halt or curtail scientific research, including needed research into cancer and childhood diseases,” according to the report.

Earlier this week, the American Medical Association cautioned that Medicare sequestration could result in 766,000 healthcare and related job losses by 2021.

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