Congress Votes Two-Month Delay in Large Medicare Fee Cut

Congress passed a temporary reprieve from a planned 21.2 percent cut in Medicare reimbursements during a break in its marathon consideration of a health care overhaul bill.

The Senate approved a two-month delay in the scheduled cut in physician reimbursement rates with a provision tucked into the massive Department of Defense spending bill (HR 3326). President Obama signed the measure on December 19, 2009.

The cuts in physician payments were scheduled to take effect on January 1.

The temporary delay is intended to give Congress a little more time to enact a permanent overhaul of the Medicare payment system that has called for cuts every year since 2002. Beginning in Fiscal 2003, Congress has replaced every scheduled cut with a freeze or small increase after lobbying by physician groups. However, the congressional interventions have left projections for cost-saving cuts to accumulate to the large 21.2 percent cut required in the 2010 budget under Medicare's cost-control mechanisms.

Dropping the planned cuts is predicted to cost more than $200 billion over the next 10 years, and that price tag led House and Senate Democrats to drop a permanent fix from their health care overhaul bills.

Republicans have countered that the payment fix belongs in any health care overhaul and charge that Democrats have kept it out to convince the public that health care reform is less expensive than Republicans claim it will be.

Senate Democrats offered to include a one-year delay in the cuts in their health care reform bill, but physician groups, including APA, opposed that move because they want to keep pressure on Congress to fix the system permanently.

“Because Congress has repeatedly ‘kicked the can’ to postpone imminent payment cuts to future years, we are facing impossibly severe cuts,” wrote 117 national and state physicians groups—including APA—to Senate leaders in mid-December.

Nicholas Meyers, director of APA's Department of Government Relations, said APA and other physicians groups are working to include a permanent replacement to the existing federal physician payment system within the health care overhaul legislation making its way through Congress. However, if that effort fails, Democratic leaders have assured physicians that they will take up the issue when Congress returns from its Christmas recess this month.

“The status quo is not sustainable; now is the time to pass legislation to permanently repeal the SGR” [sustainable growth rate formula], wrote the physicians groups.

The Department of Defense appropriations bill can be accessed at <http://thomas.loc.gov> by searching on the bill number, HR 3326.