Physicians will not face a scheduled 25% pay cut under the Medicare Physician Fee Schedule in 2011, thanks to last-minute action by Congress and the President.
On Dec. 15, President Obama signed a 1-year pay fix into law. The law will eliminate the scheduled deep fee-schedule cut and instead keep Medicare physician fees at their current rate throughout 2011. The law will also extend several Medicare payment provisions throughout 2011, including the 5% increase in payments for certain mental health services.
The legislation (H.R. 4994) was approved by the Senate on Dec. 8 and by the House on Dec. 9.
The fee fix will be paid for by small changes to the Affordable Care Act. Under the ACA, if an individual who receives a tax credit to purchase health insurance has a higher income than what they originally reported, he or she must refund the tax credit, but only up to $250 for individuals and $400 for families who are at or below 400% of the Federal Poverty Level.
Under HR. 4994, the Medicare and Medicaid Extenders Act of 2010, those amounts would be replaced by an income-based tiered repayment structure, saving the federal government about $19 billion over 10 years, according to the Senate Finance Committee.
Nancy-Ann DeParle, director of the White House Office of Health Reform, said that while signing the 1-year pay fix into law was important, the President favors a permanent solution to the Sustainable Growth Rate formula used to pay physicians under Medicare. “After years of temporary measures, the President believes it's time for a permanent solution,” Ms. DeParle wrote in a blog post on Dec. 15.
“Over the next year, the President and his team will work with Congress to address this matter once and for all. We all agree that this formula needs to be changed. Now's the time to get it done,” she added.
The American Medical Association praised Congress and the President for averting the Medicare cuts and giving the program some stability by passing a 1-year fix, as opposed to the short-term approach Congress took throughout 2010. Like the president, the AMA is also pushing Congress for a long-term solution.
“This 1-year delay comes right as the oldest baby boomers reach age 65, adding urgency to the need for a long-term solution before this demographic tsunami swamps the Medicare program,” AMA President Cecil B. Wilson said in a statement.