“Doc Fix” Bill with Medicare Offsets, Home Care Not Affected

President Barack Obama late Wednesday night signed into law the American Taxpayer Relief Act of 2012 which avoided the economic consequences of the impending “fiscal cliff” including the threat of a scheduled payment cut for physicians who treat Medicare patients that was set to take effect on January 2, 2013.  The cost of the doc fix was offset by reducing payments to hospitals and certain other Medicare providers; home care and hospice were spared.

The bill also delays the spending sequester (NAHC Report, Jan. 2, 2013)scheduled for January 1 by two months. For Medicare providers this means that the 2 percent cut in Medicare payments included in the sequester, originally set to begin February 1, will be delayed until April 1. There are still unanswered questions about how the 2 percent Medicare sequester would be applied to home health—whether it applies to claims made, claims paid, or service dates on or after 4/1.  NAHC will seek clarification on this point .

The Democratically-controlled Senate this week passed the legislation 89-8 with three senators not present for voting. The Republican-led House also approved 257-167 the bill maintaining tax cuts but hiking rates on the wealthy. While there was some discussion about adding spending cuts to the Senate bill, the lower chamber ultimately passed the bill in an up-or-down vote.

One of the provisions of the deal was the so-called “doc fix” that extended payments at current levels to Medicare physicians through December 2013.

The physician payment formula, known as the Sustainable Growth Rate (SGR), was put in place to help control the burgeoning cost of physician services under Medicare. However, the application of the formula would have made significant reductions in physician payments almost since the inception of the formula. Congress has enacted a series of short-term fixes to prevent cuts each year, offset by cutting payments to other Medicare providers.

The cost of a permanent fix has been estimated by the Congressional Budget Office (CBO) to be around $250 billion over 10 years (up to $300 billion if inflation updates are included). Congress has been unable to agree on how to pay for a permanent fix. A one year fix is estimated by CBO to cost $18.5 billion. Added to the physician fix in the package were a number of Medicare extenders, including a one year extension of the outpatient therapy cap exceptions process, which increased the total cost to $25 billion.

Although significant challenges lay ahead, the fact that home health care and hospice were spared from any cuts to pay for the physician fix is cause for celebration. NAHC would like to thank all the members of the home care and hospice community who have worked hard to educate their members of Congress about the value of home care and hospice and the importance of protecting these vital services from cuts. We should also thank those in Congress who have championed the cause of home care and hospice.

According to the Centers for Medicare and Medicaid Services (CMS), the agency is currently revising the 2013 Medicare Physician Fee Schedule (MPFS) to reflect the new law’s requirements as well as technical corrections identified since publication of the final rule in November.

From the NAHC Report Article