Doctors are getting a three-month reprieve from Congress. Included in the bipartisan two-year budget deal to fund the government is a delay until March of a scheduled 24 percent Medicare payment cut and a 0.5 percent pay increase. The president is expected to sign the legislation Friday.
While the budget deal once again postpones a decision on how to repeal the sustainable growth rate (SGR) formula, it buys time for lawmakers to reconcile differences in the House and Senate proposals for a permanent Medicare payment system based more on quality and value than the current fee-for-service.
For physicians, the budget agreement averts a full-on punch to their bottom line. Previously, the 24 percent cut was to activate Jan. 1. Physician groups expressed relief.
“The AMA is pleased that Congress acted to stop the imminent 24 percent cut to Medicare physician payments, stabilizing the program for the millions of Americans who rely on it every day while Congress completes its work on the only long-term solution – repealing the failed SGR formula that created the annual cycle of draconian Medicare payment cuts and short-term patches,” said American Medical Association President Ardis Dee Hoven, MD, in an emailed statement.
On Wednesday, the Senate passed the House version budget agreement including the three-month extension of the existing SGR and a few other healthcare-related provisions. The budget agreement removes some of sequestration cuts made across all federal agencies, but it retains an annual 2 percent reduction in Medicare rates. The budget agreement also eliminates the potential for another government shutdown going into the new calendar year.
The three-month physician payment fix and other healthcare-related provisions in the budget deal will cost about $8.3 billion over 10 years, according to the Congressional Budget Office. It recently reduced the cost of the repeal of SGR to $116.5 billion prior to the budget agreement. With the 0.5 percent increase, the first upside update since 2010, that total would come to about $125 billion.
House and Senate committees have approved similar repeal bills. Lawmakers need to reconcile the differences between the two bills.
In a statement of support for the House bill, H.R. 2810, Reid Blackwelder, MD, president of the American Academy of Family Physicians (AAFP), called on lawmakers to finally repeal the current Medicare payment formula and “replace it with a system that encourages the modernization of health care delivery” when they return to work in January.