President Obama to Sign One-Year Delay of Doctor Pay Cuts

Identical bills passed by both House and Senate. Building upon the fifth 1-month extension patch this year that delayed a steep 23% Medicare provider pay cut, the U.S. House and Representatives (by a vote of 409-2) and the U.S. Senate (unanimously) both passed another pay cut delay. This delay will last through 2011 and the $19.3 billion cost will be paid for with changes in how much money consumers would have to repay if they receive too large a subsidy in the health insurance exchanges after 2014.

According to President Obama, this “doc-fix” is an important step forward to stabilize Medicare and assure seniors access to medical care from doctors they know and trust. The American Medical Association, the AARP and other organizations support the year-long extension, suggesting that many doctors would otherwise have to stop accepting Medicare patients.

Work to be done on permanent SGR reform. The doctor pay cuts are the result of a 1990s budget-balancing law called the Sustained Growth Rate Formula that unsuccessfully tried to keep Medicare spending in line through automatic reductions. Congress repeatedly passed delays of these cuts. In fact, rate cuts have been blocked 10 times in the last eight years and lately, lawmakers have had to act every few months.

The year-long extension passed by lawmakers will give physicians and Congress the time needed to work together to develop payment models and payment reform as alternatives to the Sustained Growth Formula that are intended to create permanent stability in the Medicare program. The anticipated permanent reform will include a new way of paying doctors that rewards quality care instead of sheer numbers of tests and procedures.

For more information, please contact the Health Law Partners at (248) 996-8510, (212) 734-0128, or (770) 804-6475 or visit the HLP website.