Physician Pay Cut Avoided By the Fiscal Cliff Legislation

January 7, 2013

Physicians can breathe a sigh of relief for at least another year. The “fiscal cliff” legislation that was passed by Congress on New Year s Day and signed by President Obama Wednesday night (January 2, 2013) averted the planned cut in Medicare payments for physicians that were scheduled to take place on January 1, 2013. The press has primarily focused on the income tax aspects of the American Taxpayer Relief Act of 2012. However, the legislation included several provisions relating to health care and the Medicare program, not the least of which was the “doc fix” provision that averted the “physician pay cut.”
On January 1, 2013, the rate that Medicare pays physicians was scheduled to be cut by approximately 26.5%. This is what the health care industry has labeled the “physician pay cut.” In actuality, the physician pay cut would have been a reduction in reimbursement for providing services to Medicare patients. If it would have been allowed to take place, the physician pay cut would have resulted in significant reduction in revenues for physician services provided to Medicare patients. Physicians who have practices with high percentages of Medicare patients would have been most affected. Implications may have gone further as some private payors have reimbursement rates that are tied to Medicare rates.
The American Taxpayer Relief Act of 2012 contained a number of other provisions affecting health care providers which will be summarized in additional e-alerts over the next few days.
Health care attorney John Fisher has posted a video blog covering the “doc fix” portions of the Fiscal Cliff Legislation which you can access via this link.
If you have questions regarding the above, please contact attorney John Fisher, the author of this article, or any of the attorneys on the Health Care Focus Team of Ruder Ware.

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