Congress averts fiscal cliff, staves off Medicare physician pay cut

Tags: sgr, aafp, american medical association, american hospital association, statement, medicare, payment, congress

Once again waiting until the last minute, Congress passed a bill on New Year’s Day that averts the fiscal cliff, delays sequestration provisions for two months, and staves off the 26.5 percent cut in Medicare physician pay for another year.

The fiscal cliff agreement increases revenue largely by targeting married couples earning more than $450,000 a year and single people earning more than $400,000 a year by raising rates for wages and investment profits, but shields those earning less than $250,000 a year from income tax increases, the Washington Post reports.

As TAFP reported in the weeks leading up to this agreement, Congress had to find roughly $30 billion to pay for a one-year patch to the sustainable growth rate formula and considered reversing the Medicaid primary care bonus to offset the cost. Modern Healthcare reports (free registration required) that cuts will come from other Medicare programs, most of which affect hospitals, pharmacies, and dialysis clinics. The primary care bonus appears to be intact.

Modern Healthcare lists some of the cuts and savings: “For instance, a documentation-and-coding adjustment that seeks to recoup past overpayments to hospitals because of the shift to Medicare Severity Diagnosis Related Groups, or MS-DRGs, would save about $10.5 billion. A measure to re-price end-stage renal disease payments would save about $4.9 billion. That provision comes a few weeks after the Government Accountability Office released a report suggesting the federal government is overpaying for end-stage renal disease treatment. The bill also calls for re-basing Medicaid Disproportionate Share Hospital (DSH) payments, which is estimated to save about $4.2 billion.”

Hospital advocacy organizations have come out sharply against these cuts, saying they are “very disappointed” in the measure. “While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities,” said Rich Umbdenstock, president and CEO of the American Hospital Association, in a statement.

And physician organizations are undeniably frustrated that Congress has passed a one-year fix rather than a permanent solution to the Medicare physician payment problem.

AAFP Board Chair Glen Stream, M.D., M.B.I., said in a statement, “Congress has opened a path to assure the health security of elderly and disabled Americans by temporarily averting the more than 26 percent cut in Medicare payment for health services and delaying sequestration cuts.”

“The AAFP calls on the 113th Congress to pass legislation that ensures Americans’ future access to high quality health care through a permanent solution to Medicare physician payment and through restoration of adequate funding for programs that produce the primary care physicians Americans need.”

Jeremy Lazarus, M.D., psychiatrist and president of the American Medical Association, said in a statement, “This last-minute action on the part of Congress is a clear example of how the Medicare program is increasingly unreliable for physicians and patients. This instability stalls progress in moving Medicare toward new health care delivery models that can improve value for patients through better care coordination. Physicians want to work with Congress to move past this ongoing crisis and toward a Medicare program that ensures access to care and the best health outcomes for patients and a stable, rewarding practice environment for physicians.”

With the SGR time bomb reset to Dec. 31, 2013, AAFP will undoubtedly continue to advocate for a permanent fix to Medicare physician payment. We sincerely thank all members who joined your Academy in contacting your congressional representatives and advocating on behalf of the specialty and your patients. We’re hopeful for thoughtful and informed lawmaking in 2013.

– kalfano

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