Congress Goes Back to the Drawing Board on CMS Pay Cuts
BY LAUREN UZDIENSKI, NOVEMBER 23, 2011
On Monday the Congressional supercommittee dedicated to deficit reduction announced that their latest efforts have failed, and they would not reach an agreement by their Wednesday deadline. The committee convened to find an alternative to $1.2 trillion in budget cuts mandated by the 2013 federal budget, much of which would come from the Pentagon. However, these cuts include a scheduled 2% decrease to Medicare physician pay every year from 2013 to 2021.
This projected 2% annual cut is reminiscent of the doc-fix cuts that have been hanging over Congress for years. Since the early 2000s, Congress has passed patches to prevent scheduled pay cuts from going into effect. As a result, these cuts have snowballed, and current law mandates that CMS will cut physician pay by 27.4% on January 1st. It is expected that, as in prior years, Congress will intervene to block the cuts.
The Wall Street Journal suggests that the supercommittee represents another missed opportunity for resolving the pay cuts and ending the annual Congressional patches. The cuts are calculated from a measure called the SGR, which was introduced in the Balanced Budget Act of 1997 and intended to align physician pay to overall economic growth. The fact that Congress has essentially ignored this legislation over the past several years, even in the face of the massive deficit and other broader budget issues, helps support the need for SGR reform.
