Skip to content Skip to navigation

Legislation averts 'fiscal cliff', LTC provider group reacts

January 2, 2013
by Healthcare Informatics and Long-Term Living
| Reprints

At approximately 11 p.m. on Tuesday, Jan. 1, the U.S. House of Representatives concluded voting, by a margin of 257 to 167, to approve a bill that the U.S. Senate had approved at about 1:57 a.m. Tuesday, to avert the so-called “fiscal cliff” triggered on Tuesday by prior legislation passed in 2011. The legislation forestalled for several weeks the triggering of federal budget sequestration, which would have unleashed $110 billion in across-the-board federal spending cuts, including across-the-board 2-percent Medicare reimbursement cuts to healthcare providers.

But after nearly 24 hours of suspense and confusion in the U.S. Capitol following the concluding of a deal between Vice President Joe Biden and Senate Minority leader Mitch McConnell on Monday, John Boehner, Speaker of the House of Representatives, allowed the Senate-passed bill to be debated and voted on in the House. For a number of hours on Tuesday, it was unclear whether that action would take place, as some conservative House Republicans had demanded that the Senate bill move to the House floor for a vote only if amendments could be added to it. The addition of any amendments, however, would effectively have killed the bill, as the Senate had already adjourned, and Thursday, Jan. 3 was set to usher in a new Congress.

Among the elements of the legislation, which now goes to President Obama for his signature, are, as reported by The New York Times, the following:

> On the taxation side, the legislation maintains current rates on income below $400,000 for unmarried individuals and $450,000 for couples; above that, the bill would permanently increase tax rates from 15 percent to 20 percent above those levels.

> The legislation allows payroll taxes to rise on Tuesday to 6.2 percent from 4.2 percent on workers’ first $113,700 of income.

> Automatic federal spending cuts are paused for two months, and paid for with unspecified spending cuts elsewhere.

> With regard to the sustainable growth rate (SGR) gap in Medicare physician payments, the legislation puts into place a one-year “doc fix” to prevent a 26.9-percent immediate Medicare reimbursement cut to physicians.

> On the other hand, the nation will officially hit its debt limit on Monday, and this legislation does not address the need to lift the debt ceiling, which, depending on the specifics of federal spending, will probably be reached by late February or early March.

As commentators noted on the television networks during the voting, Congress and the White House face three big battles over spending, including how to handle the sequester, overall government funding, and the next lifting of the debt ceiling.

“Yes, we do face two months of fighting, and there is a real difference of viewpoint” over federal spending, E.J. Dionne, the Washington Post columnist, commented to Richard Louie on MSNBC immediately following the vote.

Meanwhile, at 11:20 p.m., just 20 minutes after the House vote, President Barack Obama spoke to the press in the White House briefing room, applauding Congress’s action. “I want to thank all the leaders of the House and Senate; in particular, I want to thank the work that was done by my extraordinary work that was done by my vice president, Joe Biden," as well as by Senate Minority Leader Mitch McConnell, Senate Majority leader Harry Reid, House Speaker Boehner, and House Minority Leader Nancy Pelosi. “This is just one step in a broader effort to strengthen the economy for everybody,” he said. He noted that he and Speaker Boehner had tried to negotiate a bigger agreement, but that the votes had not been available to strike what’s been called a “grand bargain.”

Meanwhile, President Obama said, “The aging population and the rising costs of healthcare” make Medicare spending a problem, and that program has to be reformed, he said; but he added that reforms must be thoughtful and strategic.

“So we’re going to have to continue to move ahead in deficit reduction, but we have to do it in a balanced way,” the President said. “And while I will negotiate over many things, we can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the impact on the global economy would be catastrophic.” He concluded by stating that it would be important to proceed collaboratively in order to address budget deficits while protecting the needs of Americans; but that Congress and the White House could do a better job to resolve these budgetary and tax issues, while also accomplishing numerous important strategic policy goals for the country.

American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) President and CEO Mark Parkinson today released a statement following congressional approval of the deal:
 
"We are grateful that the House and Senate steered away from cuts to Medicare through the sequester. As we’ve shown throughout these negotiations, the long term and post-acute sectors stand at the brink of our own cliff, already reeling from deep cuts to Medicaid and Medicare throughout 2012.
 
"As Congress prepares for legislation to raise the debt ceiling, we stand ready to work with lawmakers to continue acknowledging cuts are something we cannot absorb in 2013. This profession needs a break to return as healthy contributors to economic growth while delivering quality-driven health care."

Susan L. Turney, M.D., president and CEO of the Englewood, Colo.-based Medical Group Management Association (MGMA-ACMPE), released a statement in reaction to the one-year "doc fix"/"SGR patch" that said, "Although Congress again averted another massive Medicare physician payment cut at the 11th hour, this action only perpetuates another year of uncertainly for physician practices forced to continue their work under the dark cloud of looming SGR cuts and the new threat of sequestration cuts scheduled for March. Without action to permanently repeal the sustainable growth rate formula, Congress will replay this fiscally irresponsible scenario again and again, with even larger cuts awaiting practices in the near future. Physician practices," she concluded, "need a stable, predictable Medicare payment system to allow them to make sound, long-term decisions to invest in their practice,s position themselves for the future, and provide the highest quality care to Medicare patients they serve."

Topics