Senate Minority Leader Mitch McConnell (R-Ky.) spent most of Sunday night in negotiations with Vice President Biden.
The estate tax and how to offset the automatic spending cuts known as the "sequester" remain controversial.
Medicare providers have been bracing for Tuesday's outcome for months, urging Congress to repeal the sustainable growth rate and ensure that provider payments are stable in 2013 and beyond.
As early as the week before Christmas, AMA President Jeremy Lazarus warned Medicare providers to make plans for mitigating potential cuts after Jan. 1.
"With no sign of action from Congress, physicians must prepare themselves and their patients for an impending Medicare crisis," Lazarus said.
“With a full year to stop this drastic cut, it is absolutely inexcusable that Congress has failed to act, leaving Medicare patients and physicians to deal with the consequences.”
The AMA told members that "Medicare carriers will process payments for physician services provided after Dec. 31 under the normal 14-day cycle required by law," meaning the 27-percent cut will hit immediately for any services rendered in 2013.