Medicare Cuts

As of next Tuesday Medicare payments will be cut 28.5% from where they are now. What will that mean?

Medpage states:

It's looking less and less likely that Congress and the White House will strike a deal to keep the country from falling over the "fiscal cliff" next week, so physicians are preparing for a 28.5% cut in Medicare payments that will take effect on Jan. 1.

That figure includes a 26.5% cut under Medicare's sustainable growth rate (SGR) reimbursement formula and a 2% cut mandated by the Budget Control Act, the piece of legislation that outlined the tax increases and spending cuts that define the fiscal cliff.

"Given the current progress with the legislation, CMS [the Centers for Medicare and Medicaid Services] must take steps to implement the negative update," the agency said in a Dec. 19 notice on its website.

 CMS states:

The negative update of 27% under current law for the 2013 Medicare Physician Fee Schedule is scheduled to take effect on January 1, 2013. 

Medicare Physician Fee Schedule claims for services rendered on or before December 31, 2012, are unaffected by the 2013 payment cut and will be processed and paid under normal procedures and time frames.

The Administration is disappointed that Congress has failed to pass a solution to eliminate the sustainable growth rate (SGR) formula-driven cuts, and has put payments for health care for Medicare beneficiaries at risk.  We continue to urge Congress to take action to ensure these cuts do not take effect.  Given the current progress with the legislation, CMS must take steps to implement the negative update.

Under current law, clean electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt.  CMS will notify you on or before January 11, 2013, with more information about the status of Congressional action to avert the negative update and next steps.

 So what might that mean for those 55 million on Medicare:

1. Generally according to Medical Ethics if you have a physician they must see you if you are returning or being treated. Perhaps you may pushed to the end of the line but you will get an appointment, sometime.

2. If you are seeking a new physician, good luck, many will no longer take Medicare. You will be providing reimbursement lower than Medicaid. If for example you have a cancer and need special treatment and it is discovered January 1, 2013 or later, you may very well not find a physician available where the best ones are.

3. The level and quality of care may actually suffer, in small ways. You may find you are treated akin to food stamp holders at a candy store, with scorn.

So will the Fiscal Cliff cause harm? We don't really know, it does solve some problems but it creates many more. Add the ACA to the mix and one sees an explosive disruption in Health Care, a disaster which will soon expand on all fronts. Welcome to 2013.