House averts ‘fiscal cliff,’ forestalls 26.5% Medicare physician payment cut

  • January 2, 2013

The U.S. House of Representatives on Tuesday passed bipartisan legislation 257-167 that included a 1-year delay in Medicare physician payment cuts.

The 26.5% payment cut had been scheduled to take effect Jan. 1.

H.R. 8, the Job Protection and Recession Prevention Act of 2012, amends the Economic Growth and Tax Relief Reconciliation Act of 2001. It increases the income tax rate for workers earning more than $400,000 annually and extends unemployment benefits.

The Medicare physician payment cut stems from the sustainable growth rate (SGR), a key factor in annual Medicare payment updates designed to limit spending. The American Medical Association, American Academy of Ophthalmology and other medical societies have called for the SGR to be altered or repealed.

“This patch temporarily alleviates the problem, but Congress’ work is not complete; it has simply delayed this massive, unsustainable cut for 1 year. Over the next months, it must act to eliminate this ongoing problem once and for all,” Jeremy A. Lazarus, MD, AMA president, said in a news release.

“This last-minute action on the part of Congress is a clear example of how the Medicare program is increasingly unreliable for physicians and patients,” Lazarus said. “This instability stalls progress in moving Medicare toward new health care delivery models that can improve value for patients through better care coordination. Physicians want to work with Congress to move past this ongoing crisis and toward a Medicare program that ensures access to care and the best health outcomes for patients and a stable, rewarding practice environment for physicians.”

Congress has voted several times in recent years to forestall the Medicare physician payment cut.

In a statement released by the White House, President Barack Obama addressed the importance of compromise with regard to Medicare.

“I agree with Democrats and Republicans that the aging population and the rising cost of health care makes Medicare the biggest contributor to our deficit,” he said. “I believe we’ve got to find ways to reform that program without hurting seniors who count on it to survive. And I believe that there’s further unnecessary spending in government that we can eliminate.”

The final tally on the House legislation included 172 Democratic votes and 85 Republican votes in favor of the bill; 151 Republicans and 16 Democrats voted against the measure.

The Senate passed amendments to the bill Monday by a margin of 89-8.

The legislation has no impact on the previously approved cut of about 13% in Medicare cataract payments, according to Kevin R. Walter, Advocacy Communications Manager for the American Academy of Ophthalmology.

Perspective
Jeffrey Starke

Jeffrey R. Starke

  • The federal government did the only thing it seems to be good at these days, which is crisis management. In fact, virtually none of the problems were solved, just the inevitable was delayed. It punted on raising the debt ceiling and sequestration, and did nothing to fundamentally restructure what is a broken financial system. If nothing else changes, the effect on health care will be catastrophic.

    In the short run, Medicare reimbursements to physicians were not cut by 27%. However, none of the financial reforms and restructuring that are needed to make the Affordable Care Act truly transformational to American health care were addressed. My analogy is with quality and safety in health care. For decades, we in health care just put bandages on safety problems to get through the day. Now, we are trying to restructure systems and processes to fundamentally improve the system, avoid the problems, and make it as safe as possible. Our government needs to do the same thing, restructuring the financial system and processes to avoid fiscal cliffs and debt ceilings while ensuring that essential services are maintained.

    The problem will not be solved by the expression of extreme “principles” on either side of US political philosophy, but must be solved by compromise and avoidance of the fear to try a new approach. As with medicine, true change in fiscal policy will require courage and leadership, two qualities that have been almost totally lacking in Washington and state capitals all over the country.


    • Jeffrey R. Starke, MD
    • Infectious Diseases in Children Editorial Board
  • Disclosures: Starke reports no relevant financial disclosures
Perspective

Paul A. Volberding

  • We are glad to see some evidence that the Senate and House have begun to work together in addressing the nation's economy. While getting the tax agreement in place is important, the medical system will need to watch the next steps with real vigilance as the possible spending cuts may yet be a huge challenge to our ability to provide care. We do recognize that discussions on medical spending are coming soon and it will be important to do all we can to ensure as close to universal care access while making tough decisions on how we can participate in sensible cost controls.

    • Paul A. Volberding, MD
    • Director, AIDS Research Institute
      University of California, San Francisco

Perspective
Richard F. Jacobs, MD

Richard F. Jacobs

  • Although the fiscal cliff votes in the US Congress will avert higher taxes for many Americans, the issues related to the debt ceiling and future cost cuts have only been pushed down stream.  For those of us who take care of children, who depend on NIH, other extramural funding, and other federal programs for our missions, this is not a solution.  It is not a time to celebrate!  From graduate medical education support to research support to continued help for children, the current legislative crisis is not over.  It may give many of us a “sigh of relief” for the short term, but we will be back on the battle lines soon as the contentious nature of our current government continues to lead to sleepless nights and stress over the future of our profession and missions.

    • Richard F. Jacobs, MD
    • Infectious Diseases in Children Editorial Board
  • Disclosures: Jacobs reports no relevant financial disclosures
Perspective

William T. Gerson

  • Legislating as crisis management only harms (or continues to harm) those with the least political and/or financial means - if there is still a distinction between politics and money. Unfortunately our patients typically have neither. Perhaps as a board, as pediatric sub-specialists and generalists, children's hospital-based and community-based, we could articulate and then voice a vision for a nation that truly puts the well-being of all of our children first.

    • William T. Gerson, MD
    • Infectious Diseases in Children Editorial Board
  • Disclosures: Gerson reports no relevant financial disclosures.

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