CBO: As They Stand, Medicare Payment Rates to Cost $10B More in FY 2013

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The non-partisan Congressional Budget Office has estimated the financial repercussions of maintaining Medicare's current payment rates to physicians, finding it would increase federal spending by $10 billion in fiscal year 2013.

The CBO says if lawmakers override the anticipated 27 percent reduction to physician reimbursement — part of the sustainable growth rate formula, which is scheduled to take place Dec. 31 — federal spending on Medicare would consequentially exceed amounts projected in the CBO's baseline. Lawmakers have overridden the scheduled fee reductions each year since 2003.

"For example, if payment rates stayed as they are now, outlays for Medicare would be $10 billion higher in fiscal year 2013 and $16 billion higher in fiscal year 2014," according to the report.

The report also forecasts the costs of eliminating the Budget Control Act of 2011, which calls for automatic reductions for defense and nondefense programs, including entitlements, from fiscal year 2013 through 2021. In August, the CBO estimated those sequestration cuts would reduce Medicare spending by about $4 billion in FY 2013.

In its new report, the CBO projects a combined scenario: If Medicare's current payment rates for physicians are maintained and the sequestration cuts are eliminated. Those events would increase federal spending by roughly $40 billion in fiscal year 2013 and $61 billion in FY 2014, according to the report.

More Articles on Medicare, SGR and Sequestration:

Rep. Eric Cantor Leads GOP's Second Effort to Repeal IPAB
CMS to Cut Physicians' Medicare Payments 26.5% in 2013 Unless SGR Bypassed
AHA Ads Warn of Job Losses From Sequestration Cuts


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