On Friday, February 17, 2012, the House and Senate both passed this measure to freeze current Medicare Physician Pay Rates through the beginning of 2013, avoiding a 27.4% pay cut that was slated to hit providers on March 1, 2012.  Nonetheless, pay rates may still be cut as much as 32% at the beginning of 2013.  Medical Billing Resources will continue to monitor the issue and will post about any further important developments.

House and Senate negotiators have reached an agreement on temporarily fixing the SGR problem and making other changes in the Medicare program.  The agreement would freeze current payment rates through December 31, 2012.

We wanted you to have this information, but want to appropriately caution you that this is subject to change and there is no guarantee that this will be agreed to by the full House or Senate.  Both the House and Senate still have to vote on whether to pass this bill.

SGR was part of the Balanced Budget Act of 1997. It soon became apparent that significant cuts in physician reimbursements would be required to help reduce spending. For 10 years, Congress has declined to implement the reimbursement reductions.

The American Medical Association issued the following statement, “We are deeply disappointed that Congress chose to just do another patch—kicking the can, growing the problem, and missing a clear opportunity to...permanently replace the flawed Medicare physician payment formula.”

Summary of Health-related Provisions in the “Middle Class Tax Relief and Job Creation Act of 2012”

Physician Payment Rates — This provision prevents a 27.4 percent cut in Medicare physician payment rates slated to begin on March 1, 2012, and instead freezes payment rates at their current level through December 31, 2012. This provision also requires the Government Accountability Office (GAO) and HHS to submit reports to assist Congress in the development of a long-term replacement to the current Medicare physician payment system.