Congress has passed a measure that will delay the expected 27.4% physician pay cut that was set to take effect on March 1, 2012. The new ruling delays any cuts until January 1, 2013. At that time if Congress doesn’t act the physicians would be facing a 32% pay cut next year.

The issue stems from the Sustainable Growth Rate Formula (SGR), which went into effect in 1998. This complex formula was to cut fees to physicians by 4% to 5% annually over the course of the first few years. There were a few minor cuts in the first couple of years after the SGR went into effect, but then from about 2002 to present the legislature has overridden the cuts and have raised the physician fee schedule minimally.

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Due to the cumulative nature of the SGR, the projected yearly pay cut, that doesn’t go into effect is added to the next year. This why physicians are looking at an approximately 32% cut in 2013.

The measure that was passed on February 17, 2012 also extends the physical/occupation/speech therapy cap exception policy through December 31, 2012. The current 2013 therapy cap is $1,880.00 for outpatient therapy services. This cap on therapy services does not include inpatient or outpatient therapy that is done in a hospital. This discrepancy in where the patient has therapy services, not the type or duration of therapy needs to be fixed, so that patients can seek treatment in the facility that suits them.

Hopefully Congress will act this year to put an end to the uncertainty in healthcare for its Medicare beneficiaries. If legislation is not passed that permanently resolves these issues, there will be numerous physicians and non-physician providers who will be fed up enough to stop being Medicare providers. The constant question of whether or not Congress will act makes it hard for these providers to set budgets and long term goals for their practices. Hopefully we will get a resolution to this issue soon.

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