College of American Pathologists




January 2, 2013
© 2013 College of American Pathologists
Special Report
House Passes Fiscal Cliff Deal; SGR Cuts Averted for One Year

Bill Delays Sequestration Cuts for Two Months

Jan. 2, 2013—Medicare physician payments will not be cut by 26.5% now that the House of Representatives passed the American Taxpayer Relief Act (H.R. 8) by a vote of 257-167 last night following contentious debate. The Senate approved this fiscal cliff deal, which delays the Medicare physician fee cuts under the sustainable growth rate (SGR) for a year, by a vote of 89-8 early yesterday morning.

Under this package to avert tax increases and deep spending cuts in health care as well as defense spending, the sequestration cuts will be deferred for two months. Physicians are facing a 2% cut in Medicare cuts under the budget sequestration process.

The cost to delay the SGR cuts until Jan. 1, 2014, as well as other Medicare extender provisions, is estimated to cost $25 billion. This spending will be offset through a number of provisions, including extending the statute of limitations from 3 to 5 years for recouping overpayments and elimination of unobligated funds for health insurance co-ops authorized by the health care reform law. In addition, payments for advanced imaging services will be reduced based on a change in assumptions regarding the utilization of equipment.

Cuts Averted, Reform Delayed

Even though lawmakers technically breached the fiscal cliff, physicians will likely not see the 26.5% Medicare reimbursement cut, as the House passed the deal on New Year’s Day, a federal holiday. Furthermore, in a Dec. 19 Web posting directed to providers, CMS noted that electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt. However, it is important to note that while the SGR cut will be delayed for another year, the other payment changes included in the agency’s final 2013 Physician Fee Schedule are effective as of Jan. 1 (Statline, Nov. 21, 2012). This includes individual code changes, such as the payment changes to pathology services as a result of revaluation of the technical component (TC) costs of CPT codes 88300–88309.

While relieved that Congress acted to avert the SGR cut, the AMA is disappointed that the fiscal cliff deal failed to reform this flawed physician payment program, the organization’s President Jeremy Lazarus, MD, said in a statement.

“This last-minute action on the part of Congress is a clear example of how the Medicare program is increasingly unreliable for physicians and patients,” he stated. “Physicians want to work with Congress to move past this ongoing crisis and toward a Medicare program that ensures access to care and the best health outcomes for patients and a stable, rewarding practice environment for physicians.”

Get updates on SGR and sequestration news by following @CAPDCAdvocacy on Twitter.

Comment On This Article


202-354-7118  •  202-354-7155 (fax)  •  800-392-9994


Related Links