Congressional Budget Office Releases Significantly Higher Estimate of Sustainable Growth Rate Calculated to Include the Final CY 2013 Physician Fee Schedule

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On November 1, 2012, CMS announced the Physician Fee Schedule rates for 2013, implementing a 26.5 percent rate reduction required under the sustainable growth rate (SGR) formula.  The SGR is a statutorily required rate setting a reduction which controls the fees that physicians receive for their services.  If the SGR system operates as currently structured, physicians’ fees will be reduced by 26.5 percent at the beginning of 2013 and by additional amounts in subsequent years.  Notably, however, Congress has overridden the SGR every year since 2003.

On November 21, 2012, the Congressional Budget Office (CBO) updated its SGR and conversion factor estimates and projects that the costs of a one-year “patch” without a rise in physician payments has increased from the previous estimate of $18.5 billion to $25.2 billion, a rise of more than 36 percent.  The CBO’s new estimate is available at the table, available by clicking here, and this figure is the sum of projections that include a $10.6 billion amount for 2013 and then backsliding amounts through 2022 that total $25.2 billion when added together. 

For more information related to the Final CY 2013 Medicare Physician Fee Schedule (MPFS) Rule, please see the Health Headline published on November 5, 2012, entitled, “CMS Issues Final CY 2013 Medicare Physician Fee Schedule (MPFS) Rule.” 

Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.