eDocTalk article

Fiscal cliff agreement includes another close save for physician Medicare reimbursements

February 2013

On Jan. 1, while many of us were watching bowl games, Congress passed the American Taxpayer Relief Act (ATRA), which was signed into law by President Obama the next day.

The bill addresses what is now known as the "fiscal cliff," a phrase coined by Federal Reserve Chairman Ben Bernanke to describe the simultaneous onset of tax increases (due to the expiration of the Bush tax cuts) and sequestration — or across the board — spending cuts that would have begun on Jan. 1, 2013.

Legislation includes "docfix"

ATRA provides partial resolution to the fiscal cliff by addressing the expiration of the tax cuts, and it also addresses certain budget issues, but many issues are still unresolved.

Most notably to physicians and other providers, is the inclusion of the Medicare "doc fix," which suspends reductions in physician payments for an additional year. Since 1997, when the Sustainable Growth Rate (SGR) was introduced, physicians have become accustomed to close saves at the end of the year — and the same held true this year. ATRA avoids a scheduled 26.5 percent payment cut for physicians through a one-year patch.

The catch: Hospitals shoulder burden

It’s important to note that this "fix" for providers was offset by hospital cuts — through documentation and coding recoupment, extension of cuts to disproportionate share hospital payments and reductions in other reimbursements.

Another catch: Selected services — including imaging — hit with cuts

While hospitals are shouldering the largest portion of the doc fix, there are impacts to other providers as well. Those impacted provide dialysis, physical, occupational and speech therapies.

Of interest to many private practice physicians is a reduction in advanced imaging reimbursement for physician-owned CT and MRI. It is estimated that there will be a 10–20 percent reduction in reimbursement per scan, but the actual impact will be published mid-2013 in the Medicare Physician Fee Schedule.

Many unknowns remain

While ATRA provided much-needed relief to certain aspects of the fiscal cliff, there are still many unknowns. The unaddressed sequester cuts are set to start on March 1 and House Republicans have proposed replacing defense cuts with non-defense spending cuts, including bigger cuts to Medicare.

And while the House passed a short-term debt-ceiling extension through May 18, Congress will need to develop and finalize a budget in order to avoid default on federal loans.

It’s times like these when we are reminded that the only constant in health care is change. We will continue to keep you apprised of these developments and the impact we expect for Legacy and our physicians and providers.

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