Medicare Fee Cuts Delayed for a Year

Congress kicked the Medicare physician fee cut can a little farther down the road today as it passed legislation blocking the 25-percent reduction in payments that were scheduled to take effect Jan. 1. But lawmakers did what they have done for the past decade – postpone a scheduled cut, this time for a year – instead of fixing the payment system permanently.

The bill goes to President Obama for his signature.

The Texas Medical Association thanks all physicians, medical students, and alliance members who took the time to write or call their senators and representatives, urging them to stop the "Medicare Meltdown." TMA also encourages physicians to thank their Medicare patients, especially those who are members of AARP, for lobbying Congress to stop the cut.

The Medicare and Medicaid Extenders Act of 2010 stabilizes Medicare physician payments at current rates through the end of 2011 and extends several other payment policies that were set to expire at the end of this year. It would extend through 2011:

  • The "floor" on geographic adjustments made for the physician work component of the Medicare payment schedule;
  • The 5-percent payment increase for certain Medicare mental health services;
  • An exceptions process for the cap on Medicare outpatient therapy services; and
  • Payments for the technical component for certain pathology services.

"Physicians can focus their efforts for the next year on taking care of their Medicare patients without another threat of Medicare cuts next month," said TMA President Susan Rudd Bailey, MD. "The constant uncertainty of the Medicare program caused a great deal of stress for Texas physicians and our patients over the past year. Due to the threat of one payment cut after another, physicians couldn't plan for the future – many stopped taking new Medicare patients, while others dropped out of the program. All of that affects Medicare patients' ability to get the care they need by a physician of their choice."

Dr. Bailey urged Congress to find a permanent solution "to fix the 10-year-old problem" in 2011. "Nothing is more frightening than to be sick and to not know if you can get the care you need. More than 3.3 million Texas seniors, people with disabilities, and military families deserve a sustainable health care program – one they can depend on."

President Obama agrees. The day before the House vote, he issued a statement saying, "It's time for a permanent solution that seniors and their doctors can depend on, and I look forward to working with Congress to address this matter once and for all in the coming year."

The Senate passed the bill on unanimous consent on Dec. 8; the House, by a vote of 409-2 the next day.

According to the American Medical Association, the bill also includes funds to allow Medicare contractors to reprocess claims for physician services affected by provisions of the Affordable Care Act (ACA) passed last spring, with a retroactive effective date of Jan. 1, 2010. These include revisions to the geographic payment adjustments, increased payments for bone density tests, and other policies. Retroactive payment changes resulting from corrections that were made in the calculation of certain relative value units when the 2010 Medicare payment schedule was first issued could be implemented, as well, AMA said.

AMA said the approximately $19 billion cost of the legislation was offset by an increase in repayments to be made by individuals and families whose income grew significantly after they were deemed eligible for subsidies to purchase health insurance under ACA. Under current law, such repayments are capped at $250 for an individual and $400 for families; the bill would raise these caps according to an income-related scale to as much as $1,750 for an individual and $3,500 for a family making between 450 percent and 500 percent of the federal poverty level.


Last Updated On

January 31, 2011

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