Federal cuts to physician reimbursement in the Medicare program would have a negative effect on U.S. nonprofit hospitals, Fitch Ratings says.

The Budget Control Act of 2011 specified that a sequestration or cutting of federal spending would start in calendar 2013 if an alternative deficit-reduction deal could not be worked out in late 2011. The Democrats and Republicans did not reach a deal and part of the sequestration would cut Medicare spending.

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