Critical health care issue part of unfinished Congressional business

Barring action from Congress, physicians, therapists and other health care providers who see Medicare patients will get hit with a 27.4 percent reduction in their reimbursement rates starting Jan. 1, when the current law expires. Physicians and others were hoping that a permanent solution to the problem would have been part of the work of the Joint Select Committee on Deficit Reduction. The root of the problem is that the rate of growth of provider costs keeps exceeding the growth rate of the economy. When that happens, a formula enacted in 1997 calls for automatic cuts in reimbursement rates, tying them to a formula called the “sustainable growth rate.” A permanent fix for the problem would cost about $300 billion over 10 years. The fear that providers would drop out of the Medicare program because of the big cuts has motivated Congress repeatedly to find funding to prevent the cuts.

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