>>Medicare “Doc Fix” News

Nov. 22, 2010

Late Friday, the Senate passed bipartisan legislation that postpones a 23% cut in Medicare related reimbursements to physicians. The bill covers the period from December 1 to January 1.  The House had adjourned for the holiday and will be back on Nov. 29, in time to pass the bill before the Dec. 1 deadline.

“Doc-fix,” The Physician Payment and Therapy Relief Act, was written by Senator Chuck Grassley (R-IA) and Senator Max Baucus (D-MT).  It is estimated to satisfy budget requirements with savings to come from reducing reimbursement rates concerning multiple outpatient therapies. The bill also retains a 2.2% raise physicians received from an earlier “doc fix” bill. The Senate version of the bill reduces the scope of pay cuts for outpatient therapies (including speech therapy, physical therapy, etc. performed as part of same day treatment.

In another report:

Another Band-Aid for Doc Pay: Senate Agrees to One-Month Delay in Medicare Cuts

Today’s post was authored by FHWN law clerk Scott Malott

Doctors and patients that rely on Medicare for health care coverage can breathe a sigh of relief today, as the United States Senate has voted to delay a 23% pay cut for Medicare services by one month. The reduction was set to take effect on December 1, 2010, and the Senate has delayed it to January 1, 2011, which it hopes will allow enough time to develop a more permanent solution.

Extending the pay cut is nothing new, however; these are the same pay cuts that the federal government extended by six months in June, by two months in April, and by one in March. In fact, the legislature has been delaying these cuts since they were set to take effect in 2002. The cuts are due to a 1990s budget balancing law that created the Medicare sustainable growth rate (SGR) formula, which was intended to control Medicaid spending by imposing annual reductions. That formula called for a 4.8% cut in 2002, and because of the repeated delay, the necessary reduction to meet the formula’s guidelines is now 23%.

While Senators Baucus and Grassley have stated that they hope to pass a mutually acceptable 12-month postponement by the end of this year, the American Medical Association (AMA) is stumping for repeal of the SGR formula altogether. The AMA says that its members simply cannot afford the pay cuts, and many doctors have said that they may stop accepting Medicare patients if the pay cuts go through. While both Democrats and the newly empowered Republicans agree that there needs to be a solution, the difficulty comes in how to pay for it. The one-month delay that the Senate agreed to this week comes at a cost of $1 billion over the next 10 years. To completely repeal the formula, the legislators will have to come up with an estimated $300 billion over the next 10 years.

Whatever the solution, this discussion is bound to arise again before the new scheduled pay-cut date of January 1.



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