Congress passes legislation to avert physician pay cuts
Posted: Dec 09, 2010
Congress has passed legislation to avert the looming 25% pay cut for physicians under the Medicare Physician Fee Schedule, clearing the way for a 1-year pay fix to be signed into law well ahead of the cuts’ effective date of Jan. 1.

The bill (H.R. 4994) would eliminate the scheduled deep fee-schedule cut and instead keep Medicare physician fees at their current rate throughout 2011. The bill would also extend several Medicare payment provisions throughout 2011, including the 5% increase in payments for certain mental health services.

The legislation was approved by the Senate on Dec. 8 and by the House on Dec. 9. President Obama is expected to sign the bill into law soon.

The fee fix would be paid for by small changes to the Affordable Care Act. Under the ACA, if an individual who receives a tax credit to purchase health insurance has a higher income than what they originally reported, he or she must refund the tax credit, but only up to $250 for individuals and $400 for families who are at or below 400% of the Federal Poverty Level.

Under HR. 4994, the Medicare and Medicaid Extenders Act of 2010, those amounts would be replaced by an income-based tiered repayment structure, saving the federal government about $19 billion over 10 years, according to the Senate Finance Committee.

In a statement issued Dec. 8 in advance of the Senate vote, President Obama urged Congress to act quickly on the issue and reiterated his desire to work out a permanent solution to the Medicare physician pay formula so that frequent legislative fixes aren’t necessary.

“This agreement is an important step forward to stabilize Medicare, but our work is far from finished,” the president said. “For too long, we have confronted this reoccurring problem with temporary fixes and stop-gap measures. It’s time for a permanent solution that seniors and their doctors can depend on and I look forward to working with Congress to address this matter once and for all in the coming year.”

The American Medical Association also praised Congress for averting the Medicare cuts and giving the Medicare program some stability by passing a 1-year fix, as opposed to the short-term approach Congress took throughout 2010. Like the president, the AMA is also pushing Congress for a long-term solution.

“This 1-year delay comes right as the oldest baby boomers reach age 65, adding urgency to the need for a long-term solution before this demographic tsunami swamps the Medicare program,” AMA President Cecil B. Wilson said in a statement.

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