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RESOLUTION OF THE FISCAL CLIFF: THE PHYSICIANS’ SUSTAINABLE GROWTH RATE ISSUE HAS BEEN RESOLVED FOR ONE MORE YEAR

January 4, 2013 | No Comments
Posted by Frank Ciesla

In addition to all the other issues that will be coming back in 2013, the doctors will be confronted again in December 2013 with the fact that there could be a substantial reimbursement reduction in the Medicare payments starting January 1, 2014.  As pointed out in our prior blogs, because of the way the Congressional Budget Office does its scoring for budgetary purposes, it is highly doubtful that there will be a permanent resolution of the sustainable growth rate issue; and therefore every year physicians will be confronted with the reduction.

As you can see from various articles ((1) http://www.modernphysician.com/article/20130103/MODERNPHYSICIAN/301039973?AllowView=VW8xUmo5Q21TcWJOb1gzb0tNN3RLZ0h0MWg5SVgra3NZRzROR3l0WWRMWGJWZjBDRWxYek9UYktwUGZUamg5b1g4WFFERmhzbHhKSnNUYk9XNkU9&utm_source=link-20130103-MODERNPHYSICIAN-301039973&utm_medium=email&utm_campaign=mpdaily; (2) http://www.philly.com/philly/business/20130103_Hospitals_to_eat_Medicare_budget_s__doc_fix.html), the funding for this year’s resolution comes from a reduction in payments to other Medicare providers, spread over a number of years.  Therefore, in resolving next year’s, 2014, physician reduction, this source of funding will not be available.

This approach is consistent with our prior blog of December 31st, which pointed out that Woodward in his book, states that the only acceptable Medicare adjustment to the Democratic party leadership are reductions in reimbursement to health care providers, not adjustments to either payments made by Medicare beneficiaries or services rendered to Medicare beneficiaries.

Regrettably, the additional reductions to both physicians and other health providers will be on the table for both the debt ceiling debate in two months and the sequester debate around March.

This continued uncertainty must play a role in any future planning by physicians in expanding, acquiring or selling their practices, since the value of those practices clearly depends, to a large extent, on the reimbursement that they will receive for providing services to the Medicare population.

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