Medicare payment cut goes into effect

Congress has failed to pass legislation to halt a 21% cut in Medicare payment rates to physicians, allowing the cut to go into effect on March 1.

In December, Congress had passed temporary legislation delaying the scheduled payment cut until March 1. This temporary delay was passed with the idea that a long-term fix to the Medicare payment problems caused by the Sustainable Growth Rate (SGR) formula could be included in broader health care reform legislation. With the health care reform legislation stalled, Congress failed to pass any additional legislation before the March 1 deadline.

Medicare contractors will be holding March Medicare claims for 10 days. Congress is still attempting to pass legislation fixing the payment cut before contractors begin paying the March claims. If Congress succeeds in passing legislation within this timeframe, physicians should see minimal effect on their claims processing.

For more than a decade, physicians have faced perennial cuts in Medicare reimbursement due to the flawed Sustainable Growth Rate (SGR) formula, which has been used to determine Medicare physician payments. Congress has stepped in virtually every year to stop the scheduled cuts and pass short-term reprieves, thereby postponing the need to find a permanent solution to the problem and allowing the looming cuts—and the cost of eliminating them—to grow.

For information about additional changes to the Medicare program this year, and to follow congressional action on the payment cut, please visit the Running a Practice section of the ACP Web site.