House signs off on SGR bill with $800M in imaging cuts

The U.S. House of Representatives voted on January 1 to approve the Senate's fiscal cliff bill that averts a 27% reimbursement cut due to the sustainable growth rate (SGR) formula. But the legislation also includes $800 million in Medicare cuts to advanced medical imaging services -- on top of additional cuts proposed in 2012.

At 10:57 p.m. on New Year's day, the House passed the measure by a vote of 257 to 167. The legislation permanently extends middle class tax cuts and raises income tax rates on singles earning more than $400,000 per year and married couples earning more than $450,000. It also extends emergency unemployment insurance benefits for one year and postpones for two months the sequester: a package of automatic spending cuts that were part of the Budget Control Act (BCA) of August 2011.

"The agreement locks in $620 billion in high-income revenue over the next 10 years," the White House said in a statement.

The legislation fixes the SGR formula through the end of 2013, and the cost for keeping doctors' reimbursement rates stable through the end of the year is estimated to be about $25 billion, according to Cynthia Moran, assistant executive director of the American College of Radiology (ACR).

Some of the cost will be offset by cuts to other Medicare programs, including adjusting Medicaid Disproportionate Share Hospital (DSH) payments (which provide financial assistance to hospitals that serve a large number of low-income patients), as well as payment rates for outpatient dialysis services for patients with end-stage renal disease.

And in 2014, the legislation sets the equipment utilization rate at 90%.

The legislative policy-making process in Washington is tragically broken, Moran said.

"The first wave of 'fiscal cliff' remedies resulted in tax hikes for individuals earning over $400,000, but it did contain a one-year SGR patch," Moran told via email. "Unfortunately, the White House and the Democratic Senate would not open up the [Patient Protection and Affordable Care Act (PPACA)] for policy refinements to garner savings to pay for this $25 billion patch, so Senate Democrats went searching for dollar savings from the President's budget. The next round of battles will begin in a few days when [Congress] starts fighting over the debt limit, sequestration, and the federal budget."

The Medical Imaging and Technology Alliance (MITA) immediately weighed in on the legislation, stating that the fiscal cliff package's failure to delay the new medical device excise tax, along with the Medicare cuts for imaging and radiation therapy services it includes, will hinder patients' access to early disease detection and therapy services and threaten U.S. medical technology jobs.

The legislation reduces physician office Medicare payments for advanced imaging services by $800 million and hospital reimbursement for radiation therapy by $300 million over 10 years, MITA said -- which is in addition to the more than $1 billion in cuts for imaging and radiation therapy services put in place earlier in 2012.

"When you add up all the Medicare cuts and Congress' reluctance to address the $30 billion medical device tax, this legislation produces a devastating impact that harms patient access to care, moves manufacturing jobs overseas, and threatens America's leadership in medical research and development," said Gail Rodriguez, MITA's executive director. "We hope the administration and congressional leaders will take notice of the growing bipartisan opposition to the job-killing device tax and immediately repeal or delay it."

As it has passed both houses of Congress, the bill now goes to President Obama for his signature.

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