As you can see from CMS’ notice CMS intends to process bills after January 1, 2013 at the lower Medicare reimbursement rate if the issue is not resolved prior to that date.  Does this mean administration expects that a resolution of the issue will not be retroactive?

Regrettably, resolving the Sustainable Growth Rate issue for physicians has become entwined with the fiscal cliff and the provision of benefits under the Medicare program.  It is clear, based upon the trustee report {http://www.njhealthcareblog.com/2012/04/medicare-solvency-a-continuing-challenge-update/; http://www.njhealthcareblog.com/2011/08/impacts-of-the-debt-ceiling-agreement-on-medicare-providers/;http://www.njhealthcareblog.com/2011/05/medicare-solvency-a-continuing-challenge/; http://www.njhealthcareblog.com/2010/10/blog-%e2%80%93-medicare-trust-fund-solvent-thru-2029-maybe/}, that the Medicare program is in serious financial trouble.

There are only a couple of avenues or a combination of avenues to resolve the issue.  These include: (1) reducing benefits, which clearly is a position that does not appear to be politically acceptable; (2) raising Part B fee premiums (Part B premiums for those making a certain level of income are already higher than the Part B premiums for the regular Medicare beneficiaries); (3) raising the Medicare tax rate (under the Affordable Care Act, there are significant increases in the Medicare tax for those making over $200,000 as individuals, or $250,000 as joint filers, in addition to various other taxes that are in the Affordable Care Act on things like the medical device tax, etc.); (4) raising the age under which people would be eligible for Medicare (also subject to a significant amount of debate as well as questions regarding whether or not the age increase would cost the government more or less money); and (5) reducing payments to both the nonphysician providers as well as the physician providers.

Attached is an article which is the beginning of the discussion in reducing the payment to the physician providers, and as we are also aware, payments under the Affordable Care Act to the nonphysician providers are being reduced under the Affordable Care Act.

At this point, it is not clear what solution will be adopted.  However, to take an approximately 30% reduction in reimbursement will be untenable for most physicians.