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Physicians get one-year reprieve on Medicare cuts

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The deadline deal struck by Congress to prevent major tax hikes and spending cuts has physicians breathing a sigh of relief — albeit temporarily.

One of the “fixes” included in the budget deal pushes back Medicare payment cuts to physicians by one year. If a deal had not been reached, docs would see their reimbursement decreased by 27 percent beginning this year.

Raymond Saputelli, executive vice president of the New Jersey Academy of Family Physicians, said he’s really not sure much could have been done keep primary care practices afloat if the fix had not been included in the deal. Saputelli called the possibility “cataclysmic” for New Jersey.

While the one-year extension of Medicare reimbursement levels will allow family practices to plan for the remainder of 2013, looking beyond this year remains difficult.

“It’s difficult, as it would be for any business person, to plan for future growth, to plan to invest in infrastructure, especially in a time like today and in a place like New Jersey,” Saputelli said. “Then we do this dance every year where physicians, up until the very last minute, don’t know if a significant portion of their revenue is going to be slashed by sometimes almost a third. And Congress fixes it every year, and while we’re glad for that, the real issue is that it’s well past the time for our country … to look at a new payment system.”

Saputelli said he’s been with the NJAFP since 1999, and has been involved in the “doc-fix” dialogue every year during the budgeting process.

Congress found the money to implement the physician payment fix by cutting Medicare hospital reimbursement, a move that disappointed New Jersey Hospital Association president and CEO Besty Ryan.

“NJHA has long supported a fix to the physician pay cut. However, we are extremely disappointed that it was accomplished with even deeper cuts to hospitals,” Ryan said in an e-mail. “Cuts that pit one health care provider against another fail to accomplish the overall mission of providing quality and accessible care to our communities.”

Ryan added that New Jersey’s hospitals already were prepared for large Medicare cuts under the Affordable Care Act, but the additional cuts implemented through Tuesday’s deal “place yet another burden on hospitals as they fight to provide high-quality care to our patients.”

While physicians are avoiding the drastic Medicare cuts for another year, Congress’ budget deal only prevented the severe sequestration measures included in the debt ceiling negotiations for two months. Among the spending cuts included in sequestration is graduate medical education funding, among other health care programs.

Also, funding for new insurance plans under the ACA was cut significantly. The Freelancers Co-Op of New Jersey received $107 million in low-interest loans in February 2012 to start a new insurance plan, part of an initial round of $1.9 billion funding to 24 nonprofits. The remaining $1.9 billion allocated under the ACA for establishing these plans was slashed in the final deal.

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