Super Committee Failure Could Lead to Cut in Medicare Spending

  Peter Thomas
  Peter Thomas

The failure of the Select Committee on Deficit Reduction to create a plan to reduce the federal deficit by at least $1.2 trillion over the next 10 years will have direct and immediate effects on the medical community.

“One of the big sticking points is tax increases, which the Republicans do not want to see, and reductions in entitlement spending for Medicare and Medicaid, and even Social Security, which Democrats do not want to see. Trying to bridge that gap is a difficult thing,” Peter Thomas, general counsel for the National Association for the Advancement of Orthotics and Prosthetics, said in a prepared video statement.

The missed deadline will create automatic budget cuts across the board amounting to $1.2 trillion beginning in 2013 through a process called sequestration. This translates into a 2% Medicare pay cut for physicians, hospitals and other medical providers beginning in 2013.

The committee also had the opportunity to repeal Medicare’s sustainable growth rate (SGR) formula for physician reimbursement, resulting in a 27.4% pay cut on January 1. Medical societies have warned that such a dramatic cut would force many physicians to stop treating patients dependent on both Medicare and TRICARE, a military health care plan based on Medicare rates. This could lead to further consequences such as closing practices, laying off staff and postponing the purchase of electronic health records.

“The deficit committee had a unique opportunity to stabilize the Medicare program for America’s seniors now and for generations to come…A decade of uncertainty and repeated threats of steep cuts jeopardizes access to care for seniors and military families who rely on the Medicare and TRICARE programs. TRICARE rates are tied to Medicare rates, so a 27% cut to Medicare means a 27% cut to TRICARE,” Peter Carmel, MD, President of the American Medical Association (AMA), stated in an AMA press release. “The AMA is deeply concerned that continued instability in the Medicare program, including the looming 27% cut scheduled for January 1, will force many physicians to limit the number of Medicare and TRICARE patients they can care for in their practices.”

Congress can still repeal the 27.4% cut by the end of the year.

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