AAGP Legislative Update: January 15, 2013

Published Monday, January 14, 2013 11:00 am

Medicare Physician Fee Cut Averted for 2013

A scheduled 26.5 percent physician pay cut under Medicare was averted early this month with passage of the American Taxpayer Relief Act. The law delays for one year a reduction in reimbursements to physicians who care for Medicare patients, and keeps current reimbursement rates steady through December 31, 2013, providing one more in a series of short-term patches for Medicare physician payments.  The cost of the one-year patch is $25.2 billion over ten years, according to the Congressional Budget Office, paid for by cuts and adjustments to other provider payments with hospitals taking some of the biggest hits in savings intended to pay for the physician fix. AAGP has long advocated that Congress must eliminate the sustainable growth rate formula in order to gain stability in the Medicare program. AAGP will continue to work with other Medicare physician and health care provider organizations in advocating for a permanent solution to the Medicare payment system problem.

American Taxpayer Relief Act. Besides postponing the 26.5 percent cut to Medicare physician payments, passage of the American Taxpayer Relief Act repeals the CLASS program and, in its place, establishes a Commission on Long Term Care. The commission is tasked with developing a plan for the establishment, implementation, and financing of a high-quality system that ensures the availability of long-term care services and supports for individuals. The commission is also required to provide recommendations for "issues related to workers who provide long-term services and supports," including:

  • whether the number of such workers is adequate to provide long-term services and supports to individuals with long-term care needs;
  • workforce development necessary to deliver high-quality services to such individuals;
  • development of entities that have the capacity to serve as employers and fiscal agents for workers who provide long-term services and supports in the homes of such individuals; and
  • addressing gaps in Federal and State infrastructure that prevent delivery of high-quality long-term services and supports to such individuals

Budget/Finance Issues. Although not included in the fiscal cliff deal, there are several looming budget/finance issues that will take up most of Congress' attention when the new Congress convenes later in January:

  • Entitlement Programs:  Some lawmakers sought reductions in Social Security benefits and a higher eligibility age for the Medicare program as part of fiscal cliff negotiations, but no cuts were enacted. Lawmakers are likely to take up these issues in 2013.
  • Spending Cuts:  Due to legislation passed in August 2011, automatic spending cuts were scheduled to cut $55 billion from domestic programs − like infrastructure and education − and another $55 billion from military funding beginning in January 2013. Cuts were postponed until March 1. Lawmakers intend to offset the delay in these cuts by taxing transfers between traditional Individual Retirement Accounts (IRAs) and Roth IRAs, and through discretionary spending cuts.
  • Budget Deal:  Congress has yet to enact a budget for fiscal year 2013, which began on October 1, 2012. In September, Congress enacted a stop-gap spending measure, known as a continuing resolution, which will keep the government operating until March 27. If no action is taken by then, there could be a government shutdown, impacting multiple health care and veterans' programs.
  • Debt Ceiling:  The debt ceiling is the legal limit on the level of debt the federal government can hold, and the debt is expected to reach that limit early in 2013. Congress has the authority to raise the debt ceiling as needed.