Since the House and Senate were unable to agree upon legislation that includes an SGR “fix,” a 21 percent Medicare payment cut is now in full effect. The reduction was officially instated as of June 1, but CMS had directed carriers to hold claims through yesterday, June 17. Now the Agency will begin to process claims with the 21 percent cut.

Earlier this week the Senate defeated two amendments to H.R. 4213, “The American Jobs and Closing Tax Loopholes Act,” that included SGR provisions:

• Sen. Max Baucus (D-MT) offered an amendment that, among other provisions, provided for a 2.2 percent update through 2010 and a 1 percent update in 2011, with a 33 percent cut in 2012. The amendment was defeated by a vote of 45-52.
• Sen. John Thune (R-SD) offered an amendment that, among other provisions, provided for a 2.0 percent update for 2010, 2011 and 2012, followed by massive cuts of more than 30 percent. The amendment failed by a vote of 41-57

As of Friday morning, Senate leadership is reported to be discussing a free-standing - not a part of the H.R. 4213 – “doc fix” bill providing for a 2.2 percent update starting June 1 and extending through November 30. If the Senate were to pass such a bill, relief for physician would not be available until the House of Representatives could also consider and pass the bill.

It is anticipated that Congress will ultimately pass some type of Medicare payment relief and that the implemented cuts will be temporary with retroactive payment adjustments likely.

ASA supports full repeal of the SGR with replacement by a mechanism that accurately reflects the costs of providing care. Short of full repeal, ASA supports proposals that 1) provide for appropriate payment updates; 2) do not exacerbate projected future payment cuts; and 3) begin to address the magnitude of the projected payment cuts – the “SGR debt.”

ASA is following the situation closely and will provide additional information as it becomes available.