Congress raises Medicare doctor pay by 2.2% through November

The measure reverses the 21% reduction that started June 1. Pay cuts of 23% would resume Dec. 1.

By Doug Trapp — Posted June 28, 2010

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The House on June 24 adopted a Senate-passed Medicare physician pay increase of 2.2% through Nov. 30, temporarily reversing a 21% cut that Medicare contractors began applying to claims a week earlier.

The measure headed to President Obama, who signed it June 25. The Senate had approved the bill by unanimous consent on June 18.

"I believe we need to permanently reform the Medicare formula in a way that attacks our fiscal problems without punishing our hard-working doctors or endangering the benefits on which so many of our seniors rely," Obama said in a statement after the vote. "I look forward to working with Congress to achieve that goal, and I'm gratified that in the meantime they've taken the provisional step of blocking this pay cut."

American Medical Association President Cecil B. Wilson, MD, described the six-month reprieve as the latest in a series of short-term pay patches that are destabilizing Medicare.

"In December, the Medicare physician payment cut will be a whopping 23%, increasing to nearly 30% in January. Congress is playing a dangerous game of Russian roulette with seniors' health care," Dr. Wilson said.

House Speaker Nancy Pelosi (D, Calif.) initially had resisted holding a vote on the Senate-adopted Medicare pay patch until the Senate also adopted a larger jobs bill that included the six-month patch. But Pelosi conceded on June 24 that the Senate would be unable to round up the necessary support, and she allowed the House vote on the stand-alone physician pay measure to proceed. The bill passed, 417-1.

The legislation took a bumpy road to congressional approval. On May 28, the House had approved a jobs bill that would have prevented the 21% cut from taking effect and replaced rate reductions with raises through 2011. But the Senate did not take up that measure until it returned from its Memorial Day recess on June 7. By then, the Centers for Medicare & Medicaid Services had instructed Medicare contractors to hold claims until June 15 to give lawmakers more time to act, a reprieve that was later extended to June 18.

However, Senate Democrats were unable to round up the 60 votes needed to end debate on a bill combining the 19-month patch with a package of unemployment and health benefits extensions. Republicans and a few conservative Democrats refused to support the measures because they were not fully offset with spending cuts or new revenues. So Democratic leaders in the upper chamber reduced the size of the pay patch to six months and stripped it out of the bill for a separate vote on June 18. That same day, contractors began processing the first of the June claims with the 21% reduction applied.

The Centers for Medicare & Medicaid Services on June 24 did not have an estimate of how many Medicare claims had been processed with the 21% cut before Congress acted, according to CMS spokesman Peter Ashkenaz. Previously, the agency said any claims that had been paid out at the reduced rate would be reprocessed automatically with the 2.2% update once it was enacted.

Rep. John Shimkus (R, Ill.) said Republicans supported the Senate-adopted measure to prevent the Medicare cuts because it will not increase the national debt.

"Maybe we realize that if it's important enough to have, it's important enough to pay for," Shimkus said on the House floor on June 24. The 2.2% Medicare pay increase is expected to cost $6.4 billion over a decade, according to the Congressional Budget Office, paid for largely with changes to pension funding rules and Medicare hospital payments.

Other Republicans blamed Democrats for not acting more quickly to prevent the Medicare cuts. This drew a strong rebuke from Rep. Frank Pallone (D, N.J.), chair of the House Energy and Commerce health subcommittee.

Pallone noted that only one Republican supported a bill to repeal the sustainable growth rate formula when the House approved it Nov. 19, 2009. "The problem is that you're not willing to help us out," Pallone said, noting that Republicans repeatedly adopted such short-term Medicare pay patches when the GOP was in the majority.

House Energy and Commerce Committee Chair Henry Waxman (D, Calif.) said no one thinks the six-month patch is a great bill. But he said the strict parliamentary rules of the Senate led to the failure of the more comprehensive measures.

The SGR formula "should have been fixed permanently," Waxman said. "This is the best we could do."

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