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Supercommittee Failure Forces 2 Percent Physician Cut in 2013

Monday, November 21, 2011

Co-chairs Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX) of the Joint Committee on Deficit Reduction (also known as the “supercommittee”) announced that the supercommittee failed to reach an agreement on how to reduce the deficit by $1.2 trillion over 10 years.  As a result of the failure of the committee to reach an agreement, a process of automatic cuts known as sequestration is triggered.  The sequestration cuts will be implemented in equal increments over a 9-year period, beginning in Fiscal Year 2013.  Unless overridden or amended by Congress, this sequestration mechanism would cause across-the-board cuts in federal government spending, with half of the cuts coming from defense spending and the other half from other government programs including Medicare.  Cuts to the Medicare program are capped at two percent. According to initial calculations, the 2 percent cut to physician payments will total $13.49 billion spread out over 9 years.

The two percent cut would be in addition to the scheduled 27.4 percent cut in provider payments called for under the Medicare Sustainable Growth Rate (SGR) that is set to occur on January 1, 2012. While ASA is encouraged by the fact that President Barrack Obama and Congressional leadership have all expressed strong support for averting the scheduled 27.4 percent SGR cut set to go into effect January 1, 2012, the failure of the supercommittee shows how difficult it is in Washington to gain bipartisan agreement on any item.  ASA will continue to lobby Congress to ensure this cut does not go into effect.

Because the cuts do not go into effect until Fiscal Year 2013, there is still time for possible Congressional action. For example, Congress could pass legislation to reduce the deficit by the same amount as the sequester, change the cuts associated with the sequester, or eliminate the sequester altogether.  Whether or not such changes could be agreed upon is highly speculative, and President Obama has previously threatened to veto any future legislation that changes the sequester cuts. Against this backdrop, ASA will continue to lobby Congress on anesthesiology’s unique Medicare “33 Percent Problem,” highlighting the added pain that could come from the Independent Payment Advisory Board. 

Read the full statement from the co-chairs

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