Medicare doctors were kept in suspense for a while, but now it’s clear they have, for the time being, escaped pay reductions. What exactly does recent Congressional action mean for Medicare beneficiaries?
January 1, 2013, Congress postponed a massive payment reduction to Medicare doctors by maintaining rates at 2012 levels. American Medical Association President, Jeremy A. Lazarus, M.D., says the Congressional solution is merely temporary. In 2014, payment rates will be reduced by about 25 percent even without further congressional action. This is actually the 12th “doc fix” over the past decade putting off supposed cuts in Medicare reimbursement rates.
This farce began in 1997, when Congress decided that Medicare’s budget would grow using the Sustainable Growth Rate (SGR) formula, which matched the rate of growth of the economy. But the growth of Medicare spending has actually doubled that of the economy, and the system is now unsustainable.
Budget Cuts Loom around the Next Corner
Congressional action also delayed another two-percent cut to Medicare physician payments that’s mandated under the automatic spending reduction process referred to as budget sequestration. On March 1, Congress must act again to prevent that reduction from taking effect. Likely with another short-term fix.
The bottom line: we’ve still got serious funding issues for Medicare, and politicians who are unwilling to face some tough decisions. The further Congress kicks the can down the road, the more painful the permanent fixes are going to be.
Jim McFadden has over 11 years of executive-level experience in the health insurance industry, is a youth baseball, softball and football coach, and has one of the worst fantasy football records in the world.