The SGR Saga : Version 11.0

Under current law, radiologists and all physician providers will face steep across-the-board reductions in payment rates, based on a formula, the Sustainable Growth Rate (SGR), which was adopted in the Balanced Budget Act of 1997. Without a change in the law from Congress, Medicare payment rates will be reduced by 27.4 percent for services in 2012. While this cut would obviously be substantial, this will be the eleventh time that the SGR has called for a cut in physician reimbursement. With the exception of the calendar year 2002, these cuts were always avoided by last minute intercessions by Congress.

Currently, House Majority Leader Eric Cantor is quietly working both sides of the Capitol to build support for a plan to scale back automatic spending cuts, enacted by the supercommittee’s failure, and to combine the proposal with a wide range of critical year-end tax and spending measures. What it amounts to is a major year-end pitch: Democrats and President Barack Obama would get their much sought-after payroll tax cut extension and jobless benefits, while Republicans would tweak the Pentagon cuts that defense hawks dislike.

Cantor has spoken to senators from both parties about support for the potential package that would include up to $133 billion in spending cuts in exchange for delaying the first year of slashes to defense and nondefense programs slated to begin in 2013. That package includes a reform and a yearlong extension of jobless benefits, a payroll tax break and the Medicare reimbursement rate for physicians.

However, many say that adding provisions overhauling the automatic cuts would be one of the more controversial ideas in a year-end package. Speaker John Boehner (R-Ohio), is not in favor of touching the automatic cuts until next year and The White House has already sent out a warning against messing with these so-called ‘trigger spending cuts’ born out of the deficit supercommittee’s failure, so it’s far from clear that Cantor’s maneuvering could win enough support on Capitol Hill.

Brad Dayspring, Cantor’s spokesman, said Cantor “continues to talk to House and Senate members from both sides of the aisle in an effort find common ground on these important issues.” At this point it’s far from clear whether Cantor’s approach will gain steam in the final month of the year.

ADVOCATE will continue to keep you informed as the plot thickens.

Best regards,
Kirk Reinitz, CPA
President & CEO