Medicare Doctor Pay Patch Sets Up 32% Cut for 2013 February 29, 2012 AMA, Payment doc fix, Medicare physician pay patch, SGR 0 The 10-month postponement of cuts to Medicare physician payment rates leaves Congress in what some see as its toughest spot to date when it comes to preventing deep pay reductions. Lawmakers missed a major opportunity to pass a long-term solution to the broken Medicare sustainable growth rate formula. The pursuit of yet another short-term patch makes attaining a permanent fix to the SGR in 2012 significantly more difficult, with the price of a repeal going even higher above the $300 billion mark and the added pressures of competing for legislative attention in a presidential election year. A payroll tax reduction extension package approved by Congress and signed into law on Feb. 22 by President Obama also freezes Medicare doctor pay rates for the rest of 2012. Medicare pay was set to decrease by 27.4% on March 1 after Congress had postponed the SGR cut for only two months in December 2011. But keeping rates stable only through the end of the year means that pay is scheduled to decrease by an estimated 32% in January 2013. AMA and CMA have strongly criticized the temporary fix. Organized medicine made a concerted bid for Congress to break the cycle of payment patches by using funds projected to be saved from winding down the wars in Afghanistan and Iraq to eliminate the SGR formula, which has threatened reductions to Medicare rates since 2002. But lawmakers rejected that strategy, instead passing legislation that spends roughly $20 billion to postpone the cut and extend other Medicare pay provisions for only 10 months, while increasing the cost of a permanent solution by about $25 billion. What it takes to buy 10 months of Medicare pay relief As part of the most recent Medicare physician pay patch, lawmakers used cuts to hospitals, labs and other areas to offset the $17.3 billion cost of freezing doctor rates for 10 months, as well as the cost of additional Medicare pay extenders in the measure. $6.9 billion through reduced funding to hospitals for unpaid Medicare co-pays and deductibles. $5 billion through reduced funding for the prevention and public health fund created by the health system reform law. $4.1 billion through rebased payments for hospitals serving a disproportionate number of low-income patients. $2.5 billion through rescinding enhanced Medicaid pay to Louisiana under the health system reform law. $2.4 billion through rebased payments for Medicare clinical laboratory services. Source: American Medical News, February 27, 2012. Comments are closed.
