Medicare Fee Cut Delayed – For Now

It seems to take Congress a little longer every year, but doctors of chiropractic and other health care providers who treat Medicare patients can rest easy (for now), semi-secure in the knowledge that they have again avoided dramatic fee reductions just as they were about to take effect. This time around, the reduction-saving provision is included in the "fiscal cliff" legislation (H.R. 8 – The American Taxpayer Relief Act) passed by the House and Senate on Jan. 1, 2013 and signed by President Obama the next day. Delayed for one year is the 27 percent fee cut that technically took effect Jan. 1, as well as an approximately 2 percent additional reduction until the end of February. The 2 percent cut is one of a series of so-called "sequestration" cuts that would have taken effect automatically on Jan. 1, 2013, and will take effect as of March 1 if Congress does not act to postpone the cuts again or approve a longer-term solution.

For the past decade or more, Congress has intervened – often at the 11th hour – to ward off impending reductions in Medicare provider fees. While 2012 was no different, it represents a disturbing trend that likely generates more angst than security. After all, congressional action at the last minute, in the face of drastic reimbursement cuts, is little comfort to health care providers forced to "wait it out" and hope for the best.

The solution, as has been proposed by more than a few health care stakeholders, is to rethink the Sustainable Growth Rate (SGR) formula, Medicare's method of calculating provider fees. Much-criticized (undoubtedly because of the annual reduction scenario providers face each year), the formula ties Medicare physician reimbursement (the Medicare Fee Schedule) to the U.S. gross domestic product, modifying provider payments annually. Since 2002, the formula has dictated that health care providers receive less for reimbursable services.