The American Taxpayer Relief Act of 2012 postpones a nearly 27 percent cut in Medicare reimbursement to physicians through December 2013, but hospitals will feel the impact over the next decade.
“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. 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.” — Jeremy A. Lazarus, MD, President, American Medical Association
“Congress averted a drastic cut of 26.5 percent from hitting physicians who care for Medicare patients on January 1,” said Jeremy A. Lazarus, MD, President, American Medical Association in a statement. “This patch temporarily alleviates the problem, but Congress’ work is not complete; it has simply delayed this massive, unsustainable cut for one year. Over the next months, it must act to eliminate this ongoing problem once and for all.”
The American Medical Association is not alone in expressing dissatisfaction with the law, which not only left the flawed sustainable growth rate (SGR) formula intact but also plans to pay for the doc fix extension by cutting expected Medicare and Medicaid payments to hospitals over the next 10 years.
The plan lowers projected Medicare payments to hospitals for inpatient care by $10.5 billion during the next decade by flattening scheduled annual Medicare base payment raises to hospitals. An additional $4.2 billion is expected to help cover the cost of the 2013 doc fix by reducing Medicaid payments to hospitals partciipating in the disproportionate share program.
“While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities,” said Richard Umbdenstock, President and CEO of the American Hospital Association in a statement release on January 1. “We will continue to work with Congress to find a permanent solution to the Medicare physician payment problem, while remaining vigilant against additional cuts that could be harmful to hospitals’ ability to fulfill their mission of caring.”
In a Congressional Budget Office report released in July 2012, it was estimated the impact of continuing to do nothing about the SGR through the year 2022 could cost taxpayers $271 billion.