Senate Passes 31-Day Medicare Physician Patch; House Action Needed After Thanksgiving

Before the Thanksgiving break, the Senate passed a measure that would create a 31-day payment "patch" to the Medicare sustainable growth rate (SGR) formula and temporarily stave off the 23% cut to physicians scheduled to take effect December 1. The legislation, called the Physician Payment and Therapy Relief Act of 2010, would continue the existing 2.2% update (expiring November 30, 2010) for an additional month through December 31, 2010, and would fully offset the cost.

The one-month physician payment update comes with a price tag of $1 billion over 10 years. The Senate's proposal would offset the cost of the patch by modifying the multiple payment procedure reduction (MPPR) finalized in the calendar year (CY) 2011 Medicare Physician Fee Schedule Final Rule by applying a 20% reduction, rather than the 25% reduction included in the final rule, to the practice-expense component for the second and subsequent outpatient physical therapy services furnished in the office setting.

The month-long patch was announced as part of a two-part deal agreed to yesterday by Senate Finance Committee leaders who will pursue a payment fix through 2011 after they win approval of the patch through 2010. The Senate's proposed fix follows lobbying by the Obama administration and physician and advocacy groups to enact a 13-month payment patch.

The House, already adjourned for the Thanksgiving recess, will take up the measure when it reconvenes, which would then prevent the December 1st reimbursement cut physicians will otherwise face. However, this 31-day fix leaves Congress with a great deal of work remaining to prevent the additional cuts that would otherwise go into effect after January 1st.