SGR Reduction Delayed For 12 Months

Sequestration Reduction Delayed Until March

On January 1, 2013 the United States Senate, by a vote of 89 – 8, adopted legislation that prevents selected taxpayers from experiencing a tax increase; prevents the scheduled 26.5% SGR related cut in physician fee schedule payments for one year and delays the 2% across-the-board cut in Medicare payments due to sequestration until early March.

The measure, brought to the House floor less than 24 hours after its passage in the Senate, was approved 257 to 167, with 85 Republicans joining 172 Democrats voting in favor. The bill was expected to be signed quickly by Mr. Obama.

In lieu of the 26.5% SGR cut, Congress approved a one-year freeze in the Medicare conversion factor used to calculate Medicare Physician Fee Schedule payments.  Congress also approved a one-year extension of several Medicare payment policies that were set to expire today.

Break Away from the Static

Included below is a list of some of the payment reductions that Congress approved as a way to “pay for” the SGR fix and also the extension of some current Medicare policies set to expire on December 31, 2013.

Other Health Provisions used to “off-set” the cost of a temporary SGR fix: 

  1. Payment for certain radiologyservices. This provision would equalize payments for stereotactic radiosurgery services provided under Medicare hospital outpatient payment system. Savings: $0.3 billion.
  2. Adjustment of Equipment Utilization Rate for Advance Imagining Services. This policy would increase the utilization factor used in the setting of payment for imaging services in Medicare from 75% to 90%. Savings: $0.8 billion.
  3. Increase statute of limitations for recovering overpayments. This provision increases the statute of limitations to recover overpayments from three to five years, based on recommendations from the Office of Inspector General at the Department of Health and Human Services. Savings: $0.5 billion.

Medicare Provider Payment provisions extended as part of the Fiscal Cliff compromise:

  1. Work Geographic Adjustment. This provision extends the existing 1.0 floor on the “physician work” index through December 31, 2013.

Best regards,
Kirk Reinitz, CPA
President/CEO