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Warning: Dangerous Physician Payment Cliffs Ahead

It was touch and go, but the new year has provided physicians with some positive news about reimbursement from Medicare and Medicaid. As a part of the legislation intended to prevent the United States from going over the “fiscal cliff,” Congress included a “doc fix” provision to temporarily prevent Medicare physician payments from being cut by an anticipated 26.5%.

Congress authorized $25.2 billion in new spending for physicians providing care for patients who are covered by Medicare; this funding overrides the payment cut that would have been implemented on January 1 in accordance with Medicare’s Sustainable Growth Rate (SGR) formula. When Congress originally passed the SGR formula (which requires cuts to physician fees when growth in physician spending exceeds a benchmark growth rate in the economy) in 1997, it was envisioned as a way to control Medicare spending. But in every year except 2002, Congress has voted to override the requirements of the law to prevent decreases in Medicare reimbursement.

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