2012: 27.4% Cut

As this newspaper went to press, The Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates payment rates under the Medicare Physician Fee Schedule starting January 2012. Based on the Sustainable Growth Rate (SGR), the rule translates to a 27.4% reduction in payments, less than the 29.5% that CMS had estimated in March 2011 because Medicare cost growth was slower than expected, according to CMS.

"This payment rate cut would have dire consequences that should not be allowed to happen," said Dr. Donald M. Berwick, CMS administrator, in a web release. "We need a permanent SGR fix to solve this problem once and for all. That’s why the President’s Budget and his Plan for Economic Growth and Deficit Reduction call for permanent, fiscally responsible reform and why we are committed to working with the Congress to achieve a permanent and sustainable fix."

This is the eleventh time the SGR formula has resulted in a payment cut, although the cuts have been averted through legislation in every year but 2002, according to CMS.