Congress Approves One-month Delay in Medicare Payment Cuts

The AP is reporting (via The Boston Globe) that Congress has agreed to a one-month delay in Medicare payment cuts to doctors.

According to the AP article, The House approved by voice vote the bill passed by the Senate earlier this month, postponing a 23% cut in doctors' pay scheduled to take effect December 1.

Rep. Frank Pallone (R-NJ), chairman of the Energy and Commerce health subcommittee, said, "This bill is a stopgap measure to make sure that seniors and military families can continue to see their doctors during December while we work on the solution for the next year.”

The article also says that Senate Finance Committee Chairman Max Baucus (D-MT) and Charles Grassley (R-IA) have revealed they are “working on a 12-month postponement that would give them time to devise a new system for paying doctors.” The article goes on to say that “repeal of the current budget formula would cost $300 billion over 10 years.” The current one-month postponement “will cost $1 billion over 10 years, to be paid for by changes in Medicare reimbursement for outpatient therapy services.”

Putting off a decision for one more month means that doctors “will face a payment cut of almost 25 percent on Jan. 1 if Congress doesn't act on another postponement.”

This article from Bloomberg notes that “payments for physician services will account for 13 percent of the $509 billion the program will spend on medical benefits this year” and that “delaying next year’s cut until 2012 would cost taxpayers at least $15.4 billion.”

The article also notes that scheduled fee cuts have climbed to 23% from the 4.8% reduction first called for in 2002 by the formula that determines physician pay rates under Medicare.