Medicare Pay Cut Delayed Yet Again, this Time for a Year

With praise received from such professional organizations as the AMA, the Senate yesterday approved a bipartisan bill that would prevent the 25% cut in Medicare reimbursement rates in 2011. It’s now up to the House—which supported previous efforts to avoid cut—to pass the bill as well.

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 says a 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 (NV), Minority Leader Mitch McConnell (KY), Finance Committee Chair Max Baucus (MT), and Chuck Grassley (IA), the ranking Republican on the committee. And 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 as indicated by the below video.

But the potential solution is a short-term one. That’s why the “AMA will be working closely with congressional leadership in the new year to develop a long-term solution to this perennial Medicare problem for seniors and their physicians,” said Wilson. “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… 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. Keep your fingers crossed.

Is the bill just delaying the inevitable? Will the cost to beneficiaries outweigh the benefits that come from delaying the cut? Do you think the AMA will be able to help find a solution that doesn’t call for reimbursement cuts? Please, tell us what you think about this oh-so important topic, and let’s a get a dialog started among you and your colleagues. Post a comment below!