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Wednesday, January 2, 2013

Medicare's fiscal cliff averted ... for now

They waited until the very last second, but members of Congress on Tuesday approved legislation that preserves Medicare physician payment rates for another year and delays planned budget cuts until March.

In the waning hours of New Year's Day, the U.S. House of Representatives passed House Resolution 8, the American Taxpayer Relief Act, which had previously been approved by the Senate. Under the act, current Medicare physician payment rates (i.e., the conversion factor) are extended through Dec. 31, 2013, thus avoiding the 26.5 percent cut required by the sustainable growth rate (SGR) formula. The act also delays, for two months, implementation of the Budget Control Act's sequestration provision, which could reduce payments by an additional 2 percent.

The $25 billion cost for the SGR patch was offset by an array of provisions. One of those included extending the statute of limitations from three to five years for recoupment of Medicare overpayments.

So, what does this mean for your Medicare payments in 2013? Well, for the next two months at least, you should not see any substantial changes. The actual payment allowance for some services may vary slightly, based on changes in relative value units assigned to those services and other elements of the Medicare physician fee schedule. If Congress fails to further address the sequestration cut, you may see a 2 percent drop in your Medicare allowances in early March. Otherwise, things should be stable through the end of the year. 

The American Academy of Family Physicians and the rest of organized medicine continue to push for a permanent solution to the SGR problem. In the meantime, Congress has provided another of its annual patches to this perennial issue.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

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