House and Senate both Pass a 1-year "Doc Fix" to Avoid Reimbursement Cuts

Breaking news today. The House has just passed the 1-year correction to the Sustainable Growth Rate (SGR) issues that threaten to reduce Medicare reimbursement to physicians by 25% starting on January 1st. The President is expected to sign the measure into law by tomorrow. This is welcome news as it will avoid the type of drama we experienced in 2010 with fee cuts being threatened several times during the year which created a messy patchwork of temporary corrections.

This provision would reverse that reduction and extend current Medicare payment rates through December 31, 2011. The estimated cost of the provision is $14.9 billion over ten years. Please note this is a 12-month fix so this issue has not yet been permanently addressed and given the high price tag to "avoid a pay cut" it remains an issue that is very difficult to explain to Mainstreet USA but has gone on for far too many years (and now across two different administrations). We can only hope that Congress will do what's right and create a permanent fix next year well in advance of the December 31st 2011 deadline.

President signs 1-month SGR Fix -- Congress must work to avoid a Jan 1 Medicare Reimbursement Cut

Some good news and some work to be done. This week, President Obama signed a 31-day Medicare physician payment extension that will temporarily postpone a 23% reduction in the payment rate. The Senate passed the one-month payment extension on November 18, and the House passed the measure on November 29. The temporary patch extends the current Medicare payment rate until December 30, and, as such, postpones the 23% reduction called for by the sustainable growth rate (SGR) formula that was scheduled to take effect December 1st.

However more work remains for this Congress before they can recess. Without further congressional intervention, the payment cut will grow to more than 25% on January 1.
Senate Finance Committee leaders this week continued the effort they started prior to the Thanksgiving recess to pursue legislation to affect a year-long patch to prevent the Medicare payment cut scheduled to go into effect January 1. The current projected cost of a 12-month fix that many expect to be included in a Medicare “extenders package” favored by Senate Finance Committee Chair Max Baucus (D-MT) is nearly $20 billion. As yet, funding offsets to pay for a 12-month patch and any extenders that many be included in future legislation have not been revealed. Both parties appear to be working to try to address this issue for 2011 during this lame duck Congress rather than returning home to their districts with a reimbursement reduction starting on January 1st.

It is important that Congress act on this issue now and avoid a potential issue or gap in reimbursement in January that could impact Medicare beneficiary access to care and would certainly jeopardize the financial stability of some physician clinics.