Medicare physician pay cut delayed as Senate clears logjam

The 21% reduction will return April 1 unless Congress delays it further. The Senate is considering a bill to make Oct. 1 the new deadline.

By David Glendinning — Posted March 8, 2010

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Senate Democrats late on March 2 were able to overcome a procedural roadblock that led to an unprecedented 21% cut in Medicare physician pay taking effect the day before. But the development bought Congress only about a month to approve a longer-term solution before the reduction comes back.

The Senate passage, by a 78-19 vote, of the Temporary Extension Act of 2010 stops the across-the-board doctor pay cut and freezes current rates through March 31. The bill, which the House passed Feb. 25, also extends numerous unemployment and health assistance programs through the end of March. President Obama signed the bill immediately.

After the vote, the American Medical Association called on the Senate to take the next step by passing a separate House-passed bill overhauling the pay system.

"The Senate should use this time to permanently repeal the flawed Medicare physician payment formula that puts access to care for seniors and military families at risk," AMA President J. James Rohack, MD, said in a March 3 statement. "AMA physicians are in Washington today meeting directly with their senators to urge them to act now on permanent reform. Access to health care for seniors, disabled and military families hangs in the balance."

The AMA held its annual National Advocacy Conference in Washington, D.C., from March 1-3.

Last-minute attempts by the Senate leadership to pass the 30-day extension bill before the cut officially took effect March 1 failed when Sen. Jim Bunning (R. Ky.) repeatedly objected to a unanimous consent request to approve the legislation. Bunning insisted that Congress avoid raising the federal deficit by offsetting the $10 billion cost of the package, preferably with unused federal stimulus money, and he did not drop his opposition until Senate leaders agreed to vote on an amendment to accomplish that offset. His amendment failed on a largely party-line vote.

The extension's enactment means that physicians might not see a single Medicare check come back with the 21% reduction applied. As the cut took effect, the Centers for Medicare & Medicaid Services said it would hold March physician claims for 10 business days, giving the Senate more time to approve a patch retroactive to the first of the month.

The 30-day reprieve is one of the shortest temporary patches Congress has approved, and the Senate is not showing signs it will soon take up the House-passed bill permanently overhauling the physician payment formula.

Even as Senate leaders worked to broker an agreement with Bunning on the month-long extension, they started moving ahead on March 2 with a separate, longer-term extension bill. Under that measure, the Medicare pay cut for physicians would be delayed until Oct. 1. Most of the other unemployment and health assistance programs would be extended through the end of this year.

"Medicare meltdown" still possible?

Senate Democrats traded heated accusations with Bunning over who was responsible for allowing the doctor cut to take effect and the unemployment assistance to expire. But the AMA said the blame for the breakdown falls on the entire upper chamber, which knew for months that the cut was coming but failed to approve the House-passed permanent reform.

"The Senate had over a year to repeal the flawed formula that causes the annual payment cut and instead they abandoned America's seniors, making them collateral damage to their procedural games," Dr. Rohack said in a March 1 statement. "Physicians are outraged because the cut, combined with the continued instability in the system, will force them to make difficult practice changes, including limiting the number of Medicare patients they can treat."

When it became clear that the Senate would run out of time to stop the March 1 cut from taking effect, doctors nationwide started expressing concerns to physician organizations about their ability to keep seeing Medicare patients -- or to keep their doors open at all. The AMA predicted a "Medicare meltdown."

Howard Fellows, MD, an oncologist in Eureka, Calif., opened his practice a year ago in what he described as an underserved area and now has a 60% Medicare patient load. As the 21% cut initially went through, he told the California Medical Assn. he couldn't stay in business under the circumstances.

"As a startup practice, we were barely surviving with Medicare's low funding for expensive chemotherapy treatments, but now, with these cuts, there is no way we can make ends meet," Dr. Fellows said. "Unless these cuts are reversed, it means the senior citizens I see will either have to drive hours away to get treatment or wait longer for a local appointment because there will potentially be one less oncologist practicing in Humboldt County."

CMA leaders were some of many physicians who came to Washington, D.C., the week of March 1 to urge lawmakers to stem the damage from the rate reduction. But the new deadline of April 1 -- and possibly Oct. 1 after that -- adds more short-term uncertainty for physicians who say they are tired of the constant threat posed by Congress choosing temporary patches over a permanent pay overhaul.

Several national and state physician organizations reminded doctors that they have until March 17 to decide whether they will participate in Medicare for 2010 -- a decision that would be retroactive to Jan. 1. CMS extended the original physician enrollment deadline when it became clear that Congress would delay the cut for only part of the year. The agency did not immediately say whether it would extend the enrollment deadline any further now that the pay cut has been pushed back to April.

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