Physicians will get a 0.5% raise in Medicare pay on Jan. 1, thanks to a last-minute legislative fix to the Sustainable Growth Rate formula signed into law by President Obama on Dec. 26.
The Pathway for SGR Reform Act of 2013 was attached as an amendment to the Bipartisan Budget Agreement of 2013. The budget deal, brokered by Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wisc.), passed the House on Dec. 12 and the Senate on Dec. 18. The Congressional Budget Office estimated that the temporary fix would cost $3.3 billion in 2014 and a total of $7.3 billion through 2023. It would be paid for by cutting Medicaid payments for hospital-based charity care and to long-term care hospitals.
The law also extends the 2% sequestration cut to Medicare payments by 2 years, to 2023.
It encourages the Centers for Medicare and Medicaid Services to simplify physicians’ administrative burden by trying to more closely coordinate quality measure requirements and give doctors more timely feedback on those measures.
The law extends funding for a variety of other health-related federal programs for an additional 3 months, including for Area Agencies on Aging.
Congress is expected to start consideration again of a permanent replacement for the SGR when it returns on Jan. 6.
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*Correction 2/05/14: The following passage was deleted from a previous version of this story as the provision was not included in the law as signed.
Finally, the law delays enforcement of the "two-midnight rule" until Oct. 2014. The goal of the two-midnight policy, which was included in the fiscal 2014 Inpatient Prospective Payment System final rule, is to cut down on hospitals using observation status to keep from admitting patients. Hospitals now have until Oct. 1, 2014 to adjust to the new policy, which requires patients to be admitted if physicians think they will need a stay longer than 48 hours.