Medicare physician pay fix not bound by new 'pay-as-you-go' rules

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Newly approved “pay-as-you-go” budget rules contain an important exception: They allow Congress to delay a pay cut for Medicare physicians for a number of years without necessarily taking money away from other areas of spending.

Pay-as-you-go rules, or “paygo” in Washington parlance, were partly responsible for helping balance the budget under the Clinton administration. Although the principle behind the concept is that Congress can only spend a dollar if it saves a dollar elsewhere, this particular version contains a number of exceptions to that rule. One such exception allows Congress to delay a major pay cut for physicians who care for Medicare patients until 2014, The Washington Post reported. A scheduled 21% decrease to Medicare physician reimbursements is scheduled to take place March 1.

Because the physician pay fix is an exception to the paygo rule, Congress will not need to immediately free up money to pay for it. The exceptions, which include extending unfunded Bush-era tax cuts for the middle class, are expected to add roughly $1.5 trillion to the deficit over the next decade, according to the Post. The House approved the rules Thursday; the Senate adopted the rules last month. The president is expected to sign them into law soon.