February 23, 2012
On February 22, 2012, President Obama signed into law legislation (H.R. 3630) that extends the payroll tax cut, continues unemployment benefits, delays scheduled cuts to Medicare physician reimbursement rates and extends the exceptions process to the outpatient therapy cap. The new law averts the 27.4 percent SGR cuts previously scheduled to go into effect on March 1, 2012 and extends current Medicare payment rates through January 1, 2013.
To fund the multi-billion "doc fix" provision, the measure calls for several health care-related budget offsets including: reductions of $6.9 billion in subsidies to hospitals for "bad debt" payments (Medicare patients who fail to pay premiums and copays); $5 billion from the health care reform law, the Patient Protection and Affordable Care Act's (PPACA) Prevention and Public Health Fund (a wellness and disease prevention fund); $4.1 billion from disproportionate share hospitals (hospitals with significant numbers of patients without insurance); $2.7 billion from clinical laboratory tests; and $2.5 billion from funds PPACA allocated to Louisiana’s Medicaid budget. The new law requires the Department of Health and Human Services (HHS) and the Government Accountability Office (GAO) to conduct studies on new methodologies for Medicare payment which physicians have repeatedly called for.
With Congress focused on the upcoming elections, the matter of the looming 32 percent cut in January 1, 2013 will inure to the lame duck Congress, which is sure to have a full agenda with the expirations on several key issues approaching. In addition to the SGR and unemployment benefits, the expiration of the so-called Bush tax cuts and attempts to stop a round of across-the-board spending cuts mandated by the Budget Control Act of 2011 will also need to be addressed.
The Academy will continue its advocacy efforts for a full repeal and replacement of the flawed SGR payment formula and repeal of the outpatient therapy cap.
To read the bill, click here.