On December 19, 2012, CMS issued a notice advising physicians of impending payment cuts to the Medicare Physician Fee Schedule.  For calendar year 2013, the sustainable growth rate formula (SGR) calls for a 26.5% cut in payments to physicians.  Based on national GDP, the SGR does not take into account actual costs incurred by providers treating Medicare patients.  Traditionally, Congress passes an adjustment at the end of the preceding calendar year to maintain a stable pay scale for physicians.  However, due to the current fiscal cliff negotiations, Congress has been unable to reach an agreement regarding the SGR adjustment.  CMS has advised physicians that all services provided through December 31, 2012 will be reimbursed at the current rate.  On January 11, 2013, CMS will issue an update regarding a possible SGR adjustment for calendar year 2013.

To view the CMS notice, please click here.  To view the CMS formula derivations, please click here.

Reporter, Paige Fillingame, Houston, +1 713 615 7632, pfillingame@kslaw.com.