Obama Signs Bill to Delay Medicare Cuts, Guarantee Doc Pay

President Obama has signed into law a bill that delays the scheduled Medicare cuts for one year, and guarantees physicians stable reimbursement through 2011.

On December 15, President Barack Obama signed into law a bill that delays for one year the scheduled 25% reduction in Medicare payments to physicians, and guarantees physicians stable reimbursement through 2011.

In addition to shelving the reduction in Medicare physician payments that would otherwise take effect on January 1, 2011, the “Medicare and Medicaid Extenders Act of 2010” (HR 4994) will also extend other expiring Medicare and Medicaid payment provisions, change limits on the amount of excess health insurance tax credits that must be repaid to the Government, and make additional Medicare and Medicaid clarifications and adjustments, according to a statement from the White House.

Last week, the Senate passed thebill by unanimous consent, and the House followed suit on Dec. 9. The legislation marks the fifth and longest physician payment patch enacted this year, and it essentially puts doctors back in the yearly "last-minute-extension" cycle Congress has followed for most of the past decade.

The American Medical Association (AMA), which has advocated for a one-year delay “to create a stable environment for seniors and their physicians,” issued a statement yesterday commending the bill’s role in delaying “the looming Medicare physician payment cut that would have hurt seniors’ health care.”

AMA president Cecil Wilson, MD, said, “Leaving behind this year’s vicious cycle of five delays was crucial to preserving health care for seniors, and it provides time for Congress to work on a long-term solution to the physician payment problem.”

However, there is still no solution for the sustainable growth rate (SGR) problem, meaning that physicians will be facing a cut of more than 25% in Medicare rates in 2012 unless Congress devices a long-term solution in the meantime, according to an online report. The pay fix will be paid for by increasing the dollar amount that individuals must pay back if they receive subsidies from the federal government to help pay for health insurance.

Under the Patient Protection and Affordable Care Act, individuals who earn up to four times the federal poverty level will receive federal subsidies starting in 2014 to help them purchase the insurance that law mandates they have.

“There is bipartisan agreement that the current system is broken, and AMA will work closely with policymakers on a long-term solution that helps physicians continue to care for seniors now and in the future,” said Wilson. “It’s clear that 2011 is the year to finally fix this problem, as the baby boomers begin relying on Medicare this January for their health coverage.”

The legislation also extends a payment mechanism that adjusts for geographic differences in the cost of providing medical care, provides exceptions for caps in cases where additional therapy services are deemed to be medically necessary, extends increased rates for ambulance services, and provides a 5% increase in payments for certain mental health services.

For more:

  • Why Medicare's 'Sustainable Growth Rate' Isn't
  • President Signs SGR Fix Bill
  • American Hospital Association Statement on 'Doc Fix' and 'Extenders'

Do you support the decision to delay Medicare cuts for one year, or do you see it as too much of a quick fix? What needs to be done to address the looming crisis?