On January 1, 2013, the U.S. Congress approved the American Taxpayer Relief Act of 2012 (the Act), concluding a protracted debate on how to prevent the United States from falling over the proverbial “fiscal cliff.” President Obama signed the legislation into law on January 2, 2013.

The legislation extends a number of individual and business taxes and unemployment insurance, but is more noteworthy for the health care community for the more than 40 Medicare and Medicaid changes, many of which will significantly affect payment for and regulation of health care items and services. The legislation also is notable for what it does not include: numerous Medicare and Medicaid changes that would have more dramatically altered the payment and regulatory landscape, and which the health care industry feared would be part of this legislation. While some in the health care industry may be breathing a sigh of relief over bullets dodged, the reprieve may be short-lived, as the Act sets Congress on a course to again consider substantial changes to Medicare, Medicaid and other entitlement programs as soon as February 2013.

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