Unfortunately, this is not an April Fool’s Joke. Medicare payments to physicians for services provided starting April 1, 2013, will be cut by 2 percent due to automatic federal budget cuts (aka sequestration). And, there will be no last minute Congressional fix to stop the April 1 effective date as federal lawmakers are on break.
One question we’re getting a lot from physicians is whether the 2 percent cut applies to payment rates reflected in the Medicare fee-for-service schedules or only to the final amount. Read the answer from our payer relations experts.
Also due to the sequester cuts, Medicare funding for graduate medical education will see a cut of 2 percent. Other federal health care funding, including public health outreach, will be reduced by 5 percent.
Urge Congress to take immediate action to address these sequester cuts.
On top of the 2 percent cuts, physicians are still faced with a massive cut in Medicare payments due to the flawed Sustainable Growth Rate (SGR) formula on Jan. 1, 2014.
Tell Congress to permanently repeal the broken payment formula and stop using short-term patches that only temporarily avert the cuts.
Why is now a good time for Congress to repeal the SGR formula?
The estimated cost to repeal the broken SGR formula is just over half the cost it would’ve been last year, says a report issued by the Congressional Budget Office. That means now is a great time for Congress to permanently repeal SGR.
The cost of permanent repeal is estimated at $138 billion, down from $244 billion last year. However, unless action is taken, physicians will be faced with an approximate 26.5 percent cut in Medicare reimbursement come Jan. 1, 2014. Congress has already spent more than $136 billion for short-term patches over the past decade.
Legislation to permanently repeal SGR would prevent a loss of $930 million for the care of elderly and disabled patients in Pennsylvania. Approximately 155,776 employees of medical practices, 2.3 million Medicare patients, and 168,228 TRICARE patients in Pennsylvania would be helped by legislation that averts these cuts.