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President signs bill forestalling Medicare physician payment cut for 1 year
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President Barack Obama signed a bill into law yesterday that creates a 1-year delay of the 25% Medicare physician payment cut that was originally scheduled to take effect on Jan. 1, 2011.
The bipartisan Medicare and Medicaid Extenders Act of 2010 (H.R. 4994) also uses provisions in new health care law to extend the current 2.2% Medicare physician payment update for 1 year.
The $19 billion 1-year fix is funded by raising limits on overpayment of consumer tax credits. Under the Patient Protection and Affordable Care Act (PPCA), individuals can receive tax credits to purchase health insurance in state-run markets, according to SpineAdvocacy — the North American Spine Society’s publication on government affairs. However, individuals must pay back up to $200 of the subsidy if they misreport their income.
Sustainable growth rate
The bill was unanimously passed in the Senate on Dec. 8 and in the US House of Representatives on Dec. 9.
The averted physician payment cut stems from the sustainable growth rate (SGR) which helps determine annual Medicare payment rates. The SGR has called for negative physician payment updates for several years.
AMA’s stance
The American Medical Association (AMA) lauded President Obama and leaders in Congress for postponing the cut.
“The AMA strongly advocated for this 1-year delay to create a stable environment for seniors and their physicians,” Cecil B. Wilson, MD, AMA president, stated in a press release. “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.”
Wilson continued, “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. 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.”
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