Medicare prepares to implement physician SGR pay cuts

NEWS IN BRIEF — Posted Dec. 31, 2012

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The agency overseeing the Medicare program has made preparations to move forward with instituting a minus 26.5% update to physician payments starting Jan. 1, 2013.

The Centers for Medicare & Medicaid Services published a Dec. 19 notice to physicians detailing how Medicare will implement the cuts mandated by the sustainable growth rate formula. Physician claims for services provided by Dec. 31 will be paid at 2012 rates, but care for patients provided on or after Jan. 1, 2013, will be paid at the lower rate unless Congress overrides the statutory cut.

“The [Obama] administration is disappointed that Congress has failed to pass a solution to eliminate the sustainable growth rate formula-driven cuts, and has put payments for health care for Medicare beneficiaries at risk,” the CMS notice stated. “We continue to urge Congress to take action to ensure these cuts do not take effect. Given the current progress with the legislation, CMS must take steps to implement the negative update.”

In previous years, CMS has held off on processing claims after a cut has taken place to give lawmakers more time to pass legislation addressing the reduction retroactively. No such measure had been approved at this article’s deadline. Medicare officials plan to notify physicians on or before Jan. 11, 2013, with more information about how they will process claims for patient services after the new year begins.

“With no sign of action from Congress, physicians must prepare themselves and their patients for an impending Medicare crisis,” said American Medical Association President Jeremy A. Lazarus, MD, after the CMS announcement. “With a full year to stop this drastic cut, it is absolutely inexcusable that Congress has failed to act, leaving Medicare patients and physicians to deal with the consequences.”

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