By David Pittman, Washington Correspondent, MedPage Today
Published: January 01, 2013
WASHINGTON -- The 26.5% cut in Medicare reimbursement mandated by the sustainable growth rate (SGR) formula was averted in a literal 11th hour vote Tuesday in the House of Representatives. The House vote to pass the "fiscal cliff" bill ok'd earlier by the Senate delays the SGR cuts for a year and pushes back another 2% cut for two months.
The bill cleared the House by a vote of 257-167; senators had passed the same bill in an 89-8 vote just after 2:00 a.m. vote.
Between the SGR and sequestor, doctors were facing a 28.5% in Medicare payments scheduled to take effect Tuesday.
The SGR "fix" faced was included in negotiations as part of a broader deal to avert the so-called "fiscal cliff", a series of dramatic spending cuts and sharp tax increases.
The bill passed Tuesday was only a partial solution, however, aimed primarily at averting tax increases on the middle class. The agreement leaves tax rates as they are for families earning more than $450,000 and extends a number of other tax breaks.
President Obama was expected to sign the bill quickly. Vice President Joe Biden worked with Senate Republicans to craft the agreement.
Speaking from the White House just after Tuesday's House vote, Obama said reducing government spending -- including in entitlement programs like Medicare -- is the next step he and Congress must address.
Earlier in the day, he praised the Senate's action. "I believe we have got to find ways to reform that program [Medicare] without hurting seniors," Obama said.
In the coming months, lawmakers must still deal with raising the nation's borrowing limit and long-term government spending. Those controls on long-term spending could include changes to Medicare. Ideas included raising the Medicare eligiblity age and forcing the wealthy to pay higher premiums.
Congress will pay for the nearly $30 billion SGR patch by, among other measures, cutting payments to hospitals. It lowers "disproportionate share" payments to facilities that care for largely poor populations and lowers the baseline for payments for inpatient stays. It also rebased bundled payments for end stage renal disease patients and reduced risk-adjusted payments to Medicare Advantage plans.
There has been talk about paying for the so-called "doc fix" by ending a provision of the Affordable Care Act that mandates paying Medicaid primary care providers at the higher Medicare rates for the next two years.
The American Medical Association applauded the temporary SGR fix, but stressed that more needs to be done. "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 association said in a statement.
Hospital groups spoke out against the way Congress paid for the fix.
"While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals' ability to care for seniors and their communities," Rich Umbdenstock, president and chief executive of the American Hospital Association said in a statement Tuesday. "That's why we are very disappointed at the approach taken in this measure."
The mandatory spending cuts under the Budget Control Act also averted Tuesday demanded a 9.4% cut in most parts of defense spending and an 8.2% cut for most nondefense agencies in fiscal 2013.
Those cuts left lingering questions for federal health agencies on how they would absorb such reduced funding. For now, those questions are delayed until Congress takes further action.
David Pittman is MedPage Today’s Washington Correspondent, following the intersection of policy and healthcare. He covers Congress, FDA, and other health agencies in Washington, as well as major healthcare events. David holds bachelors’ degrees in journalism and chemistry from the University of Georgia and previously worked at the Amarillo Globe-News in Texas, Chemical & Engineering News and most recently FDAnews.
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