Cut in Medicare fees was averted due to defense spending bill

A 21 percent reduction in physicians' Medicare fees was temporarily averted thanks to a defense spending bill signed by the President in late December.

Lawmakers offered a two-month patch to the Sustainable Growth Rate (SGR), a component of the formula Medicare uses annually to calculate physician fee schedules. Every year since 2002, the SGR called for payment reductions, but since 2003 Congress has stepped in to avert cuts.

In November last year, the U.S. House passed legislation to repeal the SGR in a separate bill to its overall health reform legislation. The Senate's reform bill did not include an SGR fix.