More on Policy and Legislation

Congress approves temporary Medicare pay cut reprieve

Congress on Monday agreed to a reprieve of scheduled 23 percent Medicare pay cuts to physicians that would have started December 1. The measure, approved by voice vote and also approved by the Senate prior to Thanksgiving, means reimbursement levels will go untouched until January 1.

But the larger problem remains: How to find a permanent fix in the payment formula for doctors. Already this year, the House and Senate have delayed the Medicare cuts four times and have made a habit of passing the stopgap measure since 2002 when the current payment formula, as enacted by Congress in the early 1990s, began spitting out payment reductions.

The one-month reprieve suggests the 112th Congress, which will be seated January 3, will again need to take quick action to forestall even greater payment cuts unless Senate and House leaders can schedule another vote for a longer delay in an already crowded schedule during the lame-duck session. Government leaders and doctors all agree that a so-called "doc fix" is needed, but so far Congress hasn't found a solution – one that is estimated will cost more than $300 billion over 10 years.

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With budget tension high in Washington, that could take some doing. Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking Republican committee member Charles Grassley (R-Iowa) have indicated they are working on passage of a 12-month pay cut delay in order to allow lawmakers time to work out a permanent fix to the problem.

Even the 30-day delay has a cost, estimated at $1 billion over 10 years, which will be paid for by lowering reimbursements for some outpatient services.

The American Medical Association and American Hospital Association applauded the temporary fix, but cautioned that additional action will be necessary to avoid a 25 percent pay cut starting Jan. 1, 2011.

"Today, Congress staved off a Medicare meltdown for seniors, but this short-term reprieve ends when a 25 percent Medicare cut to physicians begins January 1," said AMA President Cecil B. Wilson in a statement after the vote. "While this short-term delay helps ensure that physicians can continue to care for seniors for the next month, Congressional action early in December to stop the cut for one year will inject stability into the Medicare program and ensure that Medicare delivers on its promise of health coverage for America's seniors."

A failure to act quickly could result in a situation similar to one encountered earlier this year when, lacking a reimbursement cut delay, the Centers for Medicare & Medicaid Services held off on processing claims for more than two weeks in order to allow Congress time to again pass a temporary fix.

The uncertainty in the Medicare payment system has also put a cloud over the Medicare open enrollment period, which began November 15 and runs until the end of the year.

"Congress has a responsibility to keep doctors in the Medicare program," said Mara Mayor, a board member with the AARP. "It's time for politicians to come together to stop these cuts so seniors can have the peace of mind they've earned."

Wilson also weighed in at the time, saying "there is a growing concern that Medicare is becoming an unreliable payer."