Senate Passes One-Month Reprieve for Medicare Pay Cuts

The Senate unanimously passed a bipartisan bill on November 18th that will postpone a 23% cut in Medicare physician pay that was scheduled to go into effect on December 1, 2010.  The House is expected to take up the Senate bill after Thanksgiving.  Nonetheless, even if the house follows suit and approves the bills, physicians will still face a potential 25% cut effective as of January 1, 2011.

The American Medical Association (AMA) applauded the Senate for acting quickly, but called on the House to move with the same urgency.   “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.”

According to an AMA poll released on November 8, 2010, 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 (CMS) policy that reduces payments for multiple therapy services provided to patients in a single day.  The bill would lower that reduction to therapists to 20% from 25% and save $1 billion, Baucus and Grassley said.  It is estimated that a patch through the end of 2011 would cost $17 billion.