Congress Stops Medicare Cuts and Creates E-Prescribing Bonus

By a veto-proof, bipartisan majority, Congress has just passed H.R. 6331, which will rollback the 10.6% Medicare reimbursement cuts that were scheduled to become effective today and provide an incentive to physicians who adopt and utilize electronic prescribing technology.

Background regarding the Scheduled Cuts

The Centers for Medicare & Medicaid Services (“CMS”) final 2008 Medicare physician fee schedule included average scheduled cuts in excess of 10%. These perennial reimbursements cuts – which re-emerge each fiscal year – are driven by a complex reimbursement formula created by Congress in 1997 that is aimed at restraining the rate of growth of Medicare expenditures.

During the final months of 2007, Congress failed to find enough votes to rollback the 2008 cuts for the entire year, but did pass a six month moratorium on the cuts. That six month moratorium was over on July 1, 2008, but was extended for 10 additional days by the President. H.R. 6331 appears to end the deadlock over the Medicare cuts since it garnered enough votes to ensure an override of the President’s anticipated veto.

Nuts and Bolts of H.R. 6331

While H.R. 6331 addresses many issues, these are the things that are most critical to healthcare providers:

  • H.R. 6331 will rollback the scheduled Medicare reimbursement cuts of 10.6%.
  • H.R. 6331 will increase Medicare reimbursements by an additional 1.1% on January 1, 2009.
  • H.R. 6331 will provide e-prescribing bonuses equal to 2% of annual Medicare reimbursements to physicians who adopt and actively utilize electronic prescribing technology.