Docs Could Face More Cuts in Debt Deal

Legislation to raise the debt ceiling and cut the deficit, signed by the president Aug. 2, leaves physicians in limbo regarding their Medicare payments next year and in the future.

The biggest question is whether the 29.5% cut to Medicare physician fees scheduled for Jan. 1, 2012, will go into effect. This massive payment cut is called for under the Sustainable Growth Rate (SGR) formula used to set Medicare payments to physicians.

Physicians’ groups, led by the American Medical Association, lobbied Congress to include a permanent fix to the SGR in the deficit reduction package. They argued that while fixing the SGR carries a $300 billion price tag, getting the job done now would save the government money down the road. Instead, lawmakers left the SGR out of the package completely.

The new law of the land, the Budget Control Act of 2011, puts into place about $1 trillion in spending cuts over the next decade from the discretionary side of the federal budget. While these immediate cuts do not directly affect physicians, they do impact graduate medical education: Medical students who take out subsidized graduate student loans on or after July 1, 2012, will have to start paying the interest on those loans earlier.

The next round of budget cuts will be determined by the Joint Select Committee on Deficit Reduction, also known as the super committee. The 12-member panel iswill be comprised of legislators from both parties and both houses of Congress.

Sen. Patty Murray (D.-Wash Rep. Dave Camp (R.-Mich.), chairman of the House Ways and Means Committee, Rep. Fred Upton (R.-Mich.), chairman of the House Energy and Commerce Committee, Rep. James E. Clyburn (D.-S.C.), the third-ranking member of the House Democratic leadership, Rep. Xavier Becerra (D.-Calif.), a member of the House Ways and Means Committee, and Rep. Chris Van Hollen (D.-Md.), also a member of the House Ways and Means Committee. The appointments were made by party leaders in the House and Senate.

Party leaders have named the first nine members of the joint committee. Senate Majority Leader Harry Reid (D.-Nev.) appointed«https://democrats.senate.gov/2011/08/09/reid-announces-appointments-to-joint-select-committee-on-deficit-reduction/» Sen. Patty Murray (D.-Wash.)« https://murray.senate.gov/public/», who serves on both the Senate budget and appropriations committees, to co-chair the Joint Select Committee on Deficit Reduction. Her appointment immediately drew criticism from Republicans, who said she is too focused on politics because of her role as chairwoman of the Democratic Senatorial Campaign Committee. Sen. Reid also tapped Sen. Max Baucus (D.-Mont.)« https://baucus.senate.gov/», chairman of the Senate Finance Committee and an architect of the Affordable Care Act, and Sen. John Kerry (D.-Mass.)« https://kerry.senate.gov/», who was the 2004 Democratic presidential nominee, to serve on the joint committee.

Before the joint committee can forward its recommendations to the full Congress, those recommendations must be approved by a majority vote.

"There’s a lot of concern that the committee will be deadlocked," said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

The law requires the joint committee to draft legislation cutting another $1.2 trillion to $1.5 trillion in federal spending over 10 years. The committee has broad authority to consider spending cuts, taxes, and other changes across both discretionary and mandatory government programs. Funding for Affordable Care Act programs is also on the table.

The joint committee must vote on recommendations by Nov. 23, and lawmakers must vote on the joint committee’s bill by Dec. 23.

To keep the legislation from getting bogged down in the Senate, the Budget Control Act requires that the joint committee’s bill be given a fast-track, up-or-down vote requiring a simple majority to pass each chamber.

Should the joint committee’s bill fail, or if the committee deadlocks, the Budget Control Act calls for automatic cuts across the federal government totaling $1.2 trillion over 10 years.

Those cuts would include up to a 2% reduction in Medicare physician payments beginning in 2013. Under a worst-case scenario, physicians could face not only the 29.5% SGR cut in January 2012, but another 2% annual fee cut starting the following year.

The hope for physicians is that the 29.5% cut mandated by the SGR is simply so large that it would be unthinkable for members of Congress to let it go into effect. Many physicians think that Congress will do something to avert the massive SGR cut, even if it’s a temporary fix.

For example, Dr. Jonathan Leffert, chairman of the legislative and regulatory committee for the American Association of Clinical Endocrinologists, said: "Medicare patients not being able to see their physicians is pretty toxic for both Democrats and Republicans."