2012 Proposed Federal Budget Includes Extending the SGR cut for 2 years
February 16, 2011 – The recent announcement by President Obama of the $3.7 trillion budget for fiscal year 2012 includes postponing the scheduled 25% SGR cut for two years, continuing the current payment levels until September 2013.
 The two-year payment fix would cost $54 billion. The President states that payment to postpone the cut would come from several sources including:
- Provisions in place to reduce fraud, waste and abuse in Medicare, Medicaid and the Children’s Health Insurance Program
- Decreased revenue for the pharmaceutical industry by shortening the amount of time a brand-name drug can hold on to it’s market exclusivity before a generic competitor can come to the market and prohibiting brand-name drugmakers from paying generic drugmakers to delay introducing their generic product to the market
- Penalites imposed on physicians who do not comply with the electronic health records provisions in the Affordable Care Act.
The budget proposal will be battled in Congress and will take some time before it is finalizedÂ
