SGR and Sequestration Cuts Averted

  • A nearly 30% cut in Medicare physician payments was averted on Jan .1 when the House of Representatives passed H.R. 8 the American Taxpayer Relief Act, also known as the Middle Class Tax Relief Act. Previously the Senate approved the package on a vote of 89-8.

    The following health provisions were included in the package:

    • Extends current Medicare physician payment rates through Dec., 31, 2013 ( avoids 26% SGR cut)
    • Extends Geographic Work Adjustment (1.0 floor) through Dec 31, 2013
    • Defers sequestration cuts for two months (2% cut in Medicare payments and larger program cuts for other health programs ---research/public health/health professions training)
    • Includes provisions to create path to improve the provision of relevant and timely data to physicians needed in new delivery and payment models (provisions which the AMA helped frame in bipartisan negotiations with Senate Finance Committee staff)
    • Allows physician participation in clinical registries to meet Medicare quality reporting requirements (provision which AMA also helped frame in bipartisan discussions with Senate Finance staff)
    • Provides one year reauthorization of funding for National Quality Forum

    You may download two summary PDF documents:
    Document 1 - Medicare and Subtitle B Other Health Provisions
    Document 2 - Other Health Provisions

    The $25 billion cost just for the SGR patch and additional expenses for other Medicare extender provisions were offset with an array of provisions. (offset summary attached) On a positive note, proposals to eliminate the increase in Medicaid payments for primary care services and remaining funds for prevention (ACA provisions) were not adopted (as advocated by the AMA). Unfortunately, payments for advanced imaging services will be reduced based on a change in assumptions regarding the utilization of equipment. Other offsets included extending the statute of limitations from 3 to 5 years for recoupment of overpayments and elimination of unobligated funds for health insurance co-ops authorized by the Affordable Care Act. Existing obligations to health insurance co-ops will be honored.

    Physician practices would have been devastated if these cuts were not averted. We ask everyone in the physician community to join with us in continued pressure on Congress to permanently repeal the SGR to enable medicine and policymakers to focus on delivery and payment reforms which is the proper course of action.