Debate continues on Medicare physician payment cuts

Issue: January 10, 2012

Congressional leaders have until March 1 to reach consensus about how to prevent a 27.4% cut to Medicare physician payments.

The payment cut had been scheduled to take effect Jan. 1, but in an 11th-hour maneuver before adjourning for holiday recess, the U.S. House of Representatives and Senate passed a bill that delayed the cut for 2 months.

Physicians will continue to receive 2011 pay rates while lawmakers try to agree on a long-term extension.

The House on Dec. 13 passed a bill that called for a 2-year delay of the Medicare payment cut.

Four days later, the Senate passed a bipartisan compromise measure that called for a 2-month extension of the payroll tax cut and current Medicare physician payment rate. The House rejected the measure and voted to send the bill to conference.

House Republican leadership changed course Dec. 23, agreeing to the 2-month extension and allowing more time for debate.

The bill passed by voice votes with no debate in both the House and Senate.

President Barack Obama immediately signed the bill into law. The measure also extends the payroll tax cut and unemployment benefits.

The physician payment cut results in part from the sustainable growth rate (SGR), a key factor in annual Medicare payment updates.

Payments were scheduled to be reduced several times under the formula, but Congress repeatedly has implemented what is known as the “doc fix” to prevent that from happening.

Congress approved the last doc fix — a 13-month extension — in December 2010.

The American Medical Association and various other medical societies have called for the SGR to be amended or repealed.

Prior to congressional approval of the extension, the Centers for Medicare and Medicaid Services directed providers and claims administration contractors to delay filing claims for services paid under the 2012 Medicare Physician Fee Schedule for the first 10 business days of January.