(RNN) - Perhaps one of the most unknown consequences of jumping off the fiscal cliff is the possible enforcement of the Medicare Sustainable Growth Rate (SGR) formula.
The Centers for Medicare and Medicaid Services, controlled by the U.S. Department of Health and Human Services, enacted a stipulation several years ago intended to prevent too many people from going onto Medicare. In order to do so, Medicare officials began cutting Medicare pay rates to physicians by between 0.5 and 1 percent.
These cuts, however, never went into effect thanks to a so-called "Doc Fix" in which physicians continued to be paid at the current rate. If the country goes off the fiscal cliff, it's possible the Doc Fix cuts would go into place all at once. Consequently, doctors would experience about a 27 percent cut in what Medicare will pay.
Very few people, if any, want the SGR formula cuts to take place. If doctors are not getting fully reimbursed by Medicare, fewer will accept patients using Medicare. And the Medicare Payment Advisory Commission, a federal body that advises Congress on Medicare issues, has told lawmakers that the SGR formula is hurtful to the healthcare system.
In a recent letter to Congress last year, MEDPAC told lawmakers that the SGR is "fundamentally flawed and is creating instability in the Medicare program for providers and beneficiaries."
As a result, elderly patients depending on Medicare will most likely have a hard time finding a physician. And since many of these patients are elderly, many of them depend on effective healthcare.
The cuts may be a necessity for the success for the White House-backed Affordable Care Act. Commonly referred to as Obamacare, the healthcare plan is dependent on these cuts in order to properly fund it.
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