CMS has posted an update to their FAQ that more fully answers the question of Sequestration and Medicare and Medicaid EHR Incentive Payments. The short answer to the question of whether or not the sequestration will affect EHR incentive payments is yes, sort of. If you’re scheduled to receive payments through the Medicare EHR Incentive Program then those payments are subject to the mandatory reductions in federal spending, as long as the final day of your reporting period is on or after April 1st, 2013. However, if you’ll be receiving Medicaid EHR Incentive Payments then you’ll be receiving the full amount. The more complete answer, direct from the CMS website is below: Will incentive payments earned in the Medicare and Medicaid Electronic Health Records Incentive programs be affected by sequestration? Incentive payments made through the Medicare Electronic Health Records (EHR) Incentive Program are subject to the mandatory reductions in federal spending known as sequestration, required by the Budget Control Act of 2011. The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months. As required by law, President Obama issued a sequestration order on March 1, 2013. Under these mandatory reductions, Medicare EHR incentive payments made to eligible professionals and eligible hospitals will be reduced by 2%. This 2% reduction will be applied to any Medicare EHR incentive payment for a reporting period that ends on or after April 1, 2013. If the final day of the reporting period occurs before April 1, 2013, those incentive payments will not be subject to the reduction. Please note that this reduction does not apply to Medicaid EHR incentive payments, which are exempt from the mandatory reductions.