Budget Bill Passes: Physician Pay Cut Averted For Now

Bob Herman -

President Barack Obama has signed into law the Bipartisan Budget Act of 2013, which will have several effects on the country's healthcare providers.

Physicians will not experience a 24 percent Medicare reimbursement reduction required by the program's SGR, or the formula used to determine physician payments, and physicians will receive a 0.5 percent payment update through March 2014, giving lawmakers extra time to repeal and replace the SGR.

The budget plan would provide $63 billion in sequestration relief — split evenly between defense and nondefense programs — by increasing discretionary spending limits in FY 2014 and 2015. In 2014, it would raise defense discretionary spending from $498.1 billion to $520.5 billion and increase nondefense discretionary spending from $469.4 billion to $491.8 billion. In fiscal year 2015, defense spending would go up from $512 billion to $521.3 billion, while nondefense funds would increase from $483.1 billion to $492.4 billion. Congress enacted sequestration, or automatic federal budget cuts, earlier this year after lawmakers could not agree on last year's budget deal. For hospitals and other providers, this meant a 2 percent cut to Medicare reimbursements.

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