Physicians Win Reprieve in Huge Cut to Medicare Fees

Congress has extended 2010 Medicare physician payment rates through the rest of 2011, blocking a dramatic 25 percent across-the-board cut that was to have taken effect on January 1.

On December 9, the House of Representatives passed HR 4994, the Medicare and Medicaid Extenders Act of 2010, providing a 12-month extension of Medicare physician payment rates. The bill also includes a one-year extension of the 5 percent “bump” in payment for outpatient psychotherapy services under Medicare. These provisions will remain in effect through December 31, 2011.

The bill was signed by President Obama on December 15.

The extension continues a long-running saga revolving around Medicare physician payment rates. For seven years, the Medicare payment formula has consistently called for ever-more drastic cuts in physician payment, only to be delayed by Congress following lobbying by physician and other groups.

APA, the AMA, and other physician and senior groups such as AARP have consistently argued that the entire formula—especially the sustainable growth rate component, which requires increases in Medicare volume to be compensated for by decreases in payment—needs to be reformed.

“This is a significant win for APA members and all physicians nationwide,” APA Director of Government Relations Nicholas Meyers said in a statement. “The 12-month reprieve will add stability to the Medicare program for all of next year, while also allowing time for Congress to develop—with physician input—a long-term and permanent resolution to the flawed Medicare payment formula.

“APA will continue working with Congress to secure a fair and truly sustainable payment system under Medicare that is based on the actual cost of providing care,” Meyers said.

AMA President Cecil Wilson, M.D., said that the 25 percent across-the-board pay cut scheduled to go into effect on January 1 would have meant many physicians, facing increased practice costs, would be unable to continue serving Medicare patients.

“Stopping the steep 25 percent Medicare cut for one year was vital to preserve seniors' access to physician care in 2011,” he said in a statement. “Many physicians made clear that this year's roller-coaster ride, caused by five delays of this year's cut, forced them to make difficult practice changes like limiting the number of Medicare patients they could treat.”