Medicare Doctor Rates Frozen for One Year to Stop Payment Reduction

Medicare doctorThe latest news shows a cut on Medicare payments will be avoided thanks to a Medicare doctor pay freeze. Physician pay will be frozen until 2014 in an effort to keep payment rates consistent throughout the rest of this year.

On New Year’s Day, Congress was able to stop a reduction in payments to Medicare doctors by keeping the rates at 2012 levels for the duration of 2013. On January 1, the House passed a measure the Senate approved the same morning to put a stop to a Medicare pay cut that would equate to 26.5%. This made it so that proposed cuts didn’t go into affect that same morning. The bill that passed Congress that prevented a reduction in payment for services in Medicare also extended tax cuts.

The bill that passed was a compromise proposed by President Obama. This made it so any Medicare rate cuts wouldn’t be applied to any claims filed in 2013. While this is only a temporary solution to the problem, this does delay payment cuts until 2014. If Congress fails to act in time, payments will be reduced by 20%. Something has to change if the Medicare program is to last and be successful in the coming years.

While the Medicare doctor pay cut would’ve been very bad for everyone, it’s just one example of how Medicare needs to be updated and function as other current healthcare systems. Another part of the bill that passed you should know about is a 2% cut to Medicare physician pay. The bill delayed this cut by two months thanks to budget sequestration. A separate measure will need to be enacted before March 1 if this cut is to be permanently prevented.

Other reductions in the budget were used to offset the cost of cutting Medicare doctor pay. These reductions amounted to $25.2 billion. Many of these cuts are quite particular, including how bundled payments for renal disease treatments are calculated and how inpatient systems are managed. All of these added up to significant savings and allowed for this delay. Other programs were extended including increasing rates for doctors that work in low-cost states

This problem is definitely not solved yet and will still need to be addressed before 2014. However, for now, Medicare doctors and patients can breathe a small sigh of relief as coverage and payments are extended through the year.

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