Congress Approves 1-Year Delay for Medicare Pay Cuts

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With praise received from such professional organizations as the American Medical Association, the Senate this week approved a bipartisan bill that would prevent the 25% cut in Medicare reimbursement rates in 2011. The House followed its lead by approving the legislation Thursday.

At a cost of $19.3 billion over 10 years, the bill would be paid for by changing a health reform act provision that offers tax credits to those who purchase coverage, with credits scaled to an individual’s income. If a person underestimates their earnings, under the new bill, that person would have to repay at an increased amount. Yet, the AMA said the swift passage by the House will “ensure continuity of care for seniors.”

The bipartisan passage in the Senate comes thanks to sponsorship by Senate Majority Leader Harry Reid (D., Nev.), Minority Leader Mitch McConnell (R., Ky.), Finance Committee Chair Max Baucus (D., Mont.), and Chuck Grassley (R., Iowa), the ranking Republican on the committee.

AMA President Cecil B. Wilson, MD, is happy they did, saying: “The AMA congratulates the Senate for its bipartisan action to preserve seniors’ access to care by stopping next year’s steep 25 percent Medicare physician payment cut. Stopping the cut for one year will inject some much needed stability into the system for seniors and physician practices who have spent this year in limbo because of five short-term delays.”

Those five delays this year alone make up half of the rate-cut blocks over the past eight years, helping avoid the Medicare rate adjustments every year -- based on the health of the economy -- that are required under a 1997 law meant to keep the Medicare program in the black.

It would seem that physician lobbying to prevent the scheduled cut for 2011 has made and impact on the lawmakers. And for good reason; according to the AMA, the approximately 43 million people, mostly seniors, who receive Medicare benefits would have seen many of their physicians turning them away because of an inability to carry on financially and still accept Medicare patients, an already growing issue.

But the potential solution is a short-term one. That’s why the AMA's Wilson said the association will be working closely with congressional leadership to develop a long-term solution. “This one-year delay comes right as the oldest baby boomers reach age 65, adding urgency to the need for a long-term solution before this demographic tsunami swamps the Medicare program." he said. "We look forward to building on this bipartisan effort to develop a workable long-term solution to the broken physician payment system that bedevils seniors, military families and physicians.”

For physicians’ sake -- as well as their patients who receive Medicare benefits -- the AMA is urging the House to quickly pass the “critical legislation” before the end of the year, when the 25% cut is set to start.