Senate passes one-month reprieve for Medicare pay cut

House action is expected after Thanksgiving as the two senators behind the bill pledge to work for a pay patch extending through 2011.

By Chris Silva — Posted Nov. 22, 2010

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The Senate unanimously passed a bipartisan bill on Nov. 18 that prevents a 23% cut in Medicare physician pay that was scheduled to go into effect Dec. 1. However, even if the House follows by approving the bill, physicians still face the prospect of a 25% cut on Jan. 1, 2011.

The Physician Payment and Therapy Relief Act of 2010 was introduced by Senate Finance Committee Chair Max Baucus (D, Mont.) and ranking member Charles Grassley (R, Iowa). They also have agreed to work together to pursue a 12-month patch before the monthlong postponement in the pay cut expires.

The House is not expected to take up the Senate bill until after Thanksgiving. Congress returns from the holiday break on Nov. 29, at which time the House is expected to vote.

House leaders introduced their own legislation on Nov. 18 that would extend physician Medicare payments by 13 months and provide a 1% update through the end of 2011. That bill was introduced by a group led by Rep. John Dingell (D, Mich.) and several other House Democrats.

Without an extension, physicians would be hit with a 25% reduction in Medicare payments over the next two months -- 23% on Dec. 1 and an additional 2% on Jan. 1, 2011. Even if the Senate legislation is passed by the House, physicians still would face a 25% cut on Jan. 1 unless Congress steps in again.

The American Medical Association applauded the Senate for moving quickly on a bill once Congress returned from the elections on Nov. 15, but it emphasized that the House still must act on its legislation to avert the cuts.

"This is a short-term reprieve, and the AMA is urging Congress to pass a one-year fix as soon as they return from the Thanksgiving holiday," said AMA President Cecil B. Wilson, MD. "Delaying the 25% cut to the end of 2011 will inject some stability into the Medicare program for patients and physicians and provide lawmakers with time to develop a long-term solution to the broken physician payment system. Now the U.S. House must act on the legislation passed by the Senate before the Dec. 1 deadline to preserve health care for America's seniors."

Dr. Wilson said patients and physicians helped spur action this week by making more than 10,000 calls to lawmakers. The effort culminated with the AMA's "White Coat Wednesday" on Nov. 17, a day the AMA advocated for physicians to call their legislators.

According to an AMA poll released Nov. 8, 94% of adults believe the Medicare pay cuts pose a serious problem to seniors, and 81% say Congress should act immediately to stop the reductions. Among those 55 and older, 98% said the problem was serious, and 91% called for prompt congressional action.

The one-month extension in the Senate bill would be paid for using the Medicare savings from a new Centers for Medicare & Medicaid Services policy that reduces payments for multiple therapy services provided to patients in a single day. The bill also would lower that reduction to therapists to 20% from 25% and save $1 billion, Baucus and Grassley said. It's estimated that a patch through the end of 2011 would cost $17 billion.

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