President Signs Bill Delaying 21% Medicare Physician Pay Cuts through November 30th

On June 25, 2010, President Obama approved a bill that temporarily repeals the 21.3% Medicare pay cuts for doctors and replaces it with a 2.2% increase through the end of November.  The measure is retroactive to June 1st, the date the 21.3% cuts took effect.

According to the Centers for Medicare and Medicaid Services (CMS), Medicare claims administration contractors have been instructed to discontinue processing claims at the negative rate and to temporarily hold all claims for service rendered after June 1st until the 2.2% rates are tested and programmed into claims processing systems.  Processing of claims at the new rate is expected to begin no later than July 1, 2010.

The newly approved bill is the fourth in a series of legislative actions taken to avert the 2010 pay cuts, but it is only a temporary solution to the problem.  The pay cut rate may reach 23% in December of this year and 30% in January of 2011, once the reprieve is up.

President Obama acknowledged that the bill does little to provide a permanent physician payment fix.  In a statement on June 24th, he said, “We should also agree, as I’ve said in the past, that kicking these cuts down the road just isn’t an adequate solution to the problem.  The current system of recurring cuts and temporary fixes was passed into law more than 10 years ago.  It’s untenable.”