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UPDATE OF SUSTAINABLE GROWTH RATE

November 17, 2011 | No Comments
Posted by Frank Ciesla

As you are aware, the recent publication of the Medicare fee schedule updating the Sustainable Growth Rate (SGR) formula, which limits the Physician Fee reduction from approximately a 30% reduction to approximately a 27% reduction, is not a permanent solution to the problem.

Physicians need to be considering their options in regard to their Medicare patients.  The American Medical Association has issued a “Medicare Participation Kit, advising physicians of the steps to take to change their status with Medicare.  Physicians, as well as other healthcare providers, also need to be aware of the various state requirements for terminating the relationship with a patient.  The regulations of the New Jersey Board of Medical Examiners contain requirements regarding notice to patients of the termination of the physician-patient relationship.  In contrast, hospitals have a clear obligation to continue to provide the services to all patients, irrespective of the payment received (or not received) from the Medicare program.

In the environment of deficit reduction, it is not clear whether there will be a resolution of the SGR issue prior to January 1, 2012 (either a permanent resolution, or delaying the impact until January 1, 2013, after the election).  As a result, healthcare providers are being placed in a totally untenable position as to what their expectations should be concerning the revenue they will be receiving for the services that they will be providing.  Physicians may be in trouble, since a loss of revenue as a result of a failure to address the SGR issue may adversely impact their ability to maintain their staff and office.

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