After a refreshing holiday break, we here at Practice Fusion are eagerly looking forward to an exciting 2013. Already the New Year has begun in dramatic fashion with Congress passing a last minute deal just in time to avert the dreaded Fiscal Cliff. Forged by Vice President Joe Biden and Senate Majority Leader Mitch McConnell, the compromise passed with an overwhelming majority of votes in both Houses late on New Year’s Day. While the bill largely employed the “kick-the-can” approach that Congress has perfected over the past year, it included some tough decisions on tax issues.
At the center of the deal was the contentious battle over raising taxes for the wealthy. Ultimately, Democrats prevailed on the issue with rates scheduled to increase on those making over $400,000 annually. Additionally, the payroll tax holiday will end and lead to a raise in rates for everyone by about 2 percent.
Healthcare policy also played an active role in the negotiations – here are the specifics:
1) The “Doc Fix” – Congress thankfully halted the 26.5 percent cut to Medicare reimbursements that were scheduled to take effect in 2013 based on the Sustainable Growth Rate (SGR). However, in order to pay for the $30 billion fix, Congress will be making a combination of reimbursement cuts that affect hospitals treating Medicare beneficiaries. Healthcare experts have become increasingly critical of these short-term funding patches, which continue to delay a comprehensive solution on the issue of the physician payment.
2) The Affordable Care Act (ACA) – The New Year’s Day compromise also ended two pieces of the 2010 Healthcare Law. First, the CLASS Act, which had aimed to provide long term insurance programs at a modest cost, was officially repealed.,. Second, the agreement halted funding to nonprofit Consumer Oriented and Operated Plans (or CO-OPs) that were designed to compete against traditional insurance within the state health exchanges. The cuts represent approximately $2.3 billion.
What about those big, across-the-board spending cuts? You know, the cuts that were supposed to come into effect on January 1st unless Congress reached a resolution? Congress kept it dramatic and put off addressing sequestration for another two months. The Treasury will also reach its legal borrowing limit at the end of February forcing Congress into another debt-ceiling showdown. Unfortunately, this fiscal cliff business still appears far from over.
While the negotiations weren’t pretty, the deal once again demonstrates reason to believe there is hope for our nation’s leaders, who were ultimately willing to swallow make sacrifices for the good of the country. And remember, the New Year has also ushered in brand new faces to Congress – perhaps they’ll reinforce the value of compromise and bring in fresh perspective.