This year, physicians and the American Medical Association (AMA) may get the present they have been waiting 12 years to receive—the elimination of the sustainable growth rate (SGR). Implemented in 1997 as part of the Balanced Budget Act of 1997, the SGR is a mechanism to ensure that increases in Medicare expenses do not exceed the growth in gross domestic product (GDP). Each year the Medicare Payment Advisory Commission issues a report on the previous year’s expenses and recommends an adjustment to the physician pay rate. For more than a decade, Congress has passed a “doc fix” each year to suspend the SGR from going into effect for the upcoming year. 
After years of can-kicking, physicians would see a 27% cut to their Medicare payments in 2013 should the SGR go into effect. However, most experts agree it won’t. At the very least, Congress will pass another doc fix and revisit the issue again next year. However Medscape Medical News reports President Barack Obama’s latest fiscal cliff plan includes a repeal of the SGR, for which the AMA has lobbied for years. Time will tell if the repeal will go through. The Congressional Budget Office estimates that freezing Medicare rates for 10 years would cost $245 billion. Such a move would likely require budget cuts elsewhere or new taxes. CMS is taking no chances and is preparing as if Congress will miss its end-of-year deadline. In a statement released December 19, CMS said it will continue to use its normal payment procedure for claims submitted on or before December 31. For claims submitted in the New Year, CMS plans to take its time issuing payments in order to give Congress time to pass a doc fix. Although this will eliminate the need to retroactively adjust payments, the delay could have a negative effect on physicians who rely on steady cash flow to keep their practices up and running.
After years of can-kicking, physicians would see a 27% cut to their Medicare payments in 2013 should the SGR go into effect. However, most experts agree it won’t. At the very least, Congress will pass another doc fix and revisit the issue again next year. However Medscape Medical News reports President Barack Obama’s latest fiscal cliff plan includes a repeal of the SGR, for which the AMA has lobbied for years. Time will tell if the repeal will go through. The Congressional Budget Office estimates that freezing Medicare rates for 10 years would cost $245 billion. Such a move would likely require budget cuts elsewhere or new taxes. CMS is taking no chances and is preparing as if Congress will miss its end-of-year deadline. In a statement released December 19, CMS said it will continue to use its normal payment procedure for claims submitted on or before December 31. For claims submitted in the New Year, CMS plans to take its time issuing payments in order to give Congress time to pass a doc fix. Although this will eliminate the need to retroactively adjust payments, the delay could have a negative effect on physicians who rely on steady cash flow to keep their practices up and running.
