American Medical News
Posted Jan. 14, 2013
Congressional action on New Year's Day just barely prevented the Medicare sustainable growth rate formula from reducing 2013 physician pay rates by nearly 27%, and it also delayed until March 1 a separate 2% pay cut under an automatic spending reduction process known as sequestration. But despite the hectic, last-minute legislating, lawmakers knew for the entire 2012 session that both the SGR cut and the sequestration deadlines were coming at the end of the year.
American Medical News covered the latest SGR deadline throughout 2012 and has covered the sequestration issue since it surfaced during 2011 budget negotiations. The convergence of the two issues made for a particularly critical — and unsettling — year for physicians who care for Medicare patients.
The patch approved on Jan. 1 freezes Medicare physician rates through the end of 2013, avoiding what doctors said would be a patient access crisis. But the move sets up another deep cut for 2014 that Congress must deal with, and it only buys lawmakers two months to come up with an alternative for another across-the-board spending reduction under sequestration that also will affect Medicare pay.
Allowing Medicare rates for physicians, hospitals and others to be reduced under sequestration wouldn't just threaten the ability of patients to receive the care they need, groups representing those professionals have warned. It also would result in hundreds of thousands of lost jobs in the health care sector and industries that rely on it — endangering the economy's recovery from the most recent recession.
For physicians, the fiscal cliff set for the beginning of 2013 was particularly steep. That's because sequester cuts to Medicare would have been tacked onto any reduction mandated by the SGR. Still, other defense and nondefense federal programs face even larger cuts under sequestration, and some observers think doctors would be lucky if they have to give up just 2% in pay.