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Physician Payment Rates

December 13, 2012 | No Comments
Posted by Frank Ciesla

As we discussed in many prior blogs [(1) http://www.njhealthcareblog.com/2012/11/post-election-update-regarding-the-affordable-care-act/; (2) http://www.njhealthcareblog.com/2012/08/update-on-sustainable-growth-rate/; (3) http://www.njhealthcareblog.com/2012/02/no-valentine-to-physicians-from-congress-as-sgr-issue-remains-unresolved/; (4) http://www.njhealthcareblog.com/2011/12/imminent-withholding-of-medicare-physician-payments-appears-likely/; (5) http://www.njhealthcareblog.com/2011/12/still-no-action-on-sustainable-growth-rate-fix/; (6) http://www.njhealthcareblog.com/2011/11/update-of-sustainable-growth-rate/; (7) http://www.njhealthcareblog.com/2011/10/healthcare-reform-developments/; (8) http://www.njhealthcareblog.com/2011/10/sustainable-growth-rate-sgr/; (9) http://www.njhealthcareblog.com/2011/07/another-round-of-potential-physician-reimbursement-redutions/; (10) http://www.njhealthcareblog.com/2011/05/sustainable-growth-rate/; (11) http://www.njhealthcareblog.com/2011/05/medicare-balance-billing/; (12) http://www.njhealthcareblog.com/2011/04/the-confluence-of-the-sustainable-growth-rate-and-the-deficit/; and (13) http://www.njhealthcareblog.com/2010/10/blog-%E2%80%93-medicare-trust-fund-solvent-thru-2029-maybe/], if it is not addressed, the Sustainable Growth Rate will result in physician compensation being substantially reduced on January 1, 2013.  Physicians have faced this crisis every year and the reduction has been kicked down the road for one year.  There has been no permanent solution enacted.  Therefore, physicians will continue to face this crisis on a yearly basis.

Because of the way the Congressional Budget Office does its analysis, it assumes that the physician reimbursement cut will take place when the annual fix expires.  It, therefore includes in the calculation the savings to be realized as a result of such a reduction in reimbursement.

At the same time that physicians are confronted with a reduction in their reimbursement, the country is confronted with the “fiscal cliff”.  What appears to be clear at this point in time is that the physician reimbursement issue is not going to be solved separately from and before the fiscal cliff issues are resolved.  There is much discussion that the fiscal cliff will not cause great difficulty even if it is not resolved before December 31st, if it is resolved within a reasonable period of time thereafter.  In contrast, the failure to resolve the reduction in physician reimbursement will initially result in a “moratorium” in the payment of physicians for services rendered after January 1, 2013.  After that “short” moratorium, if the issue is not resolved, with the actual calculation of the physician reimbursement being implemented, physicians will receive lower reimbursement until the reimbursement issue is resolved.  Such a result would obviously have a negative effect on a practice’s cash flow.

While there are various proposals to “permanently” resolve the physician reimbursement issue caused by the Sustainable Growth Rate, based upon the past, it is likely that the resolution will only be made until January 1, 2014.

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