One-Year 'Doc Fix' Included in Fiscal Cliff Package
January 4th, 2013
On Tuesday, January 1, the House approved by a vote of 257-167 the fiscal cliff deal (HR 8) that includes a one-year payment patch for providers who treat Medicare patients under the Physician Fee Schedule. Earlier, the Senate approved the measure by a vote of 89-8. The bill was signed by the President on January 2.
The payment patch provision would avert a nearly 27 percent cut scheduled to take effect January 1 – keeping rates frozen at current levels for one year. Several times since 2001, Congress has passed legislation to delay the cuts mandated under the formula. Temporary relief from cuts year after year has only increased severity of the cuts and raised the cost of enacting a permanent solution.
The $25 billion cost of the one year extension will be offset through other spending cuts including requiring hospitals to pick up about half of the approximately $25 billion cost over the next decade. According to Kaiser Health News, these spending cuts will include a $10.5 billion cut from projected Medicare hospital payments over 10 years for inpatient or overnight care through a downward adjustment in annual base payment increases. The measure will also reduce Medicaid disproportionate share payments to hospitals by an additional $4.2 billion over the next decade. Additional items that will offset the “doc fix” include payment changes for end stage renal disease, competitive bidding for diabetic testing supplies, and reducing risk-adjusted payments to Medicare Advantage plans.
A proposal to eliminate an increase in Medicaid payments for primary care services established under the Affordable Care Act was not adopted. Additionally, proposed reductions for E&M outpatient services were not included in the package. AGS opposed both of these proposed payment reductions.
AGS, along with other provider organizations, urged Congress to include the SGR patch in the fiscal cliff package. As the 113th Congress begins, we will continue to work with policymakers on proposals to repeal and replace the unworkable SGR formula with a payment system that properly values and enhances high quality care of older adults.
In addition to the physician payment fix, the bill delays a series of automatic cuts in federal spending, called “sequestration,” which also would have included a 2 percent payment cut to Medicare providers, including hospitals. This would have been separate and in addition to the nearly 27 percent cut that the bill also averted. The package, which also alters tax rates, will delay ‘sequestration’ until early March. Funding for Title VII and VIII Geriatrics Workforce Training Programs and the National Institute on Aging will remain unchanged for the next two months.
Other health care related items of interest include the repeal of the Community Living Assistance Services and Supports (CLASS) program established under the Affordable Care Act, which analysts have predicted would be financially unsustainable. However, the package does establish a Commission on Long Term Care tasked with developing a plan for the establishment, implementation, and financing of a high quality system that ensures the availability of long-term services and supports for individuals.
Payment Reform Needed Now – Contact Your Members of Congress Today
Earlier this week, Congress approved a bill to avert the Medicare pay cut through the end of 2013 (see above story). While the short term patch is a relief for providers, we need a long-term solution. Clearly, the SGR formula has proven to be neither sustainable for providers nor beneficial for older Americans. Contact your members of Congress now and urge them to call for both the repeal of the SGR and comprehensive Medicare payment and delivery reform.
Modified On: January 4th, 2013
