On Monday, November 29, 2010, the U.S. House of Representatives
approved a bill passed in mid-November by the U.S. Senate which
would delay a cut in physicians' reimbursement rates under
Medicare. President Obama signed the legislation delaying the
Medicare physician pay cut late on November 30, so that instead of
a 23% Medicare pay cut for physicians, there is a 2.2%
reimbursement increase. The cut was originally scheduled to become
effective December 1, 2010; the bill postpones the effective date
until January 1, 2011.
The recent congressional postponement is not the first time the
Medicare physician reimbursement rate cuts have been delayed.
Starting in 2003, Congress has repeatedly delayed such cuts. In
2008, when Congress failed to act in time to extend a temporary
postponement of a 10.6% rate cut, Medicare held physicians'
claims to avoid paying them at lower rates and to afford Congress
more time to act. In 2010 alone, Congress has delayed the proposed
23% cut three times. In March and April of 2010, Congress voted to
delay enforcement of the proposed cuts and to extend the 2009
rates. In June 2010, legislation was passed that not only delayed
the cuts but actually increased reimbursements by 2.2%.
The one-month postponement is estimated to cost about $1 billion
over 10 years, to be paid for with savings from cuts in
reimbursement for therapy services.
Congress has repeatedly delayed implementing physician
reimbursement rate cuts due to public fears, and threats by
physicians and medical associations, that large numbers of
physicians will drop out of the Medicare program should their
reimbursement rates be lowered, and that those members of the
population covered by Medicare, including the elderly and disabled,
would be unable to obtain necessary medical care. Because
reimbursement rates for Tri-Care are tied to Medicare reimbursement
rates, these cuts would also be expected to affect military service
members and their families. Members of the Senate Finance Committee
indicated that the one-month postponement will allow the chance to
develop a longer-term fix. Senate Finance Committee Chairman, Max
Baucus, D-Mont., and the panel's top Republican, Charles
Grassley of Iowa, say they are working on a 12-month postponement
that would provide time to devise a new system for paying doctors.
The American Medical Association has backed a 13-month extension
which would protect doctors from a reimbursement rate cut until
2012. The Congressional Budget Office has indicated that such an
extension would cost $15 billion.
While it is unclear whether the one-month delay will afford
Congress enough time to design and implement a long-term fix,
physicians will at least continue to be reimbursed under the
current rates until the end of the year. Doctors will face a
payment cut of almost 25% on January 1 if Congress doesn't act
on another postponement.
In a statement released by the White House, President Obama is urging Congress "to now pass a one-year extension to ensure seniors maintain access to the doctor they know and trust over the coming year." It is interesting to note that the first baby boomers turn 65 next year and become Medicare eligible, marking the start of a large expansion of the Medicare population.
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