The Bipartisan Budget Act of 2013, signed into law by President Obama on December 26, included the Pathway for SGR Reform Act of 2013. The budget deal prevented a scheduled 20.1% reduction in Medicare payments to physicians and other providers from taking effect on January 1, 2014, instead providing for a 0.5% payment increase for claims with dates of service through March 31, 2014. The short-term reprieve is intended to give Congress additional time to finalize pending legislation that would permanently repeal the Sustainable Growth Rate (SGR) formula upon which annual Medicare physician fee schedule changes are based. The annual doc fix problem and proposed SGR repeal bills were previously discussed here.
The budget deal also provided limited relief from the sequestration cuts in certain federal spending programs for fiscal years 2014 and 2015, but did not reverse the 2% reduction in payments under Medicare and other mandatory federal programs. Such cuts will actually be extended for two years, through 2023, unless a different deficit reduction framework is adopted before then.