Obama Signs Bill to Delay Medicare Pay Cuts

This article originally appeared on HCPLive.com.

President Obama signed legislation that delays for one year the scheduled 25% reduction in Medicare payments to doctors, and guarantees physicians stable reimbursement through 2011.

In addition to shelving the reduction in Medicare reimbursements that would otherwise take effect on Jan. 1, 2011, the “Medicare and Medicaid Extenders Act of 2010” also extends other expiring Medicare and Medicaid payment provisions, change limits on the amount of excess health-insurance tax credits that must be repaid to the federal government, and make additional Medicare and Medicaid clarifications and adjustments, according to a statement from the White House.

Last week, the Senate passed the bill by unanimous consent, and the House followed suit on Dec. 9. The legislation marks the fifth and longest physician payment patch enacted this year, and it essentially puts doctors back in the yearly "last-minute-extension" cycle Congress has followed for most of the decade.

The American Medical Association, which has advocated for a one-year delay “to create a stable environment for seniors and their physicians,” issued a statement this week commending the bill’s role in delaying “the looming Medicare physician payment cut that would have hurt seniors’ healthcare.”

“Leaving behind this year’s vicious cycle of five delays was crucial to preserving health care for seniors, and it provides time for Congress to work on a long-term solution to the physician payment problem,” AMA President Cecil Wilson, MD, said in a statement.

However, there is still no solution for the sustainable growth rate (SGR) problem, meaning that physicians will be facing a cut of more than 25% in Medicare rates in 2012 unless Congress come up with a long-term solution, according to an online report. The pay fix will be paid for by increasing the dollar amount that individuals must pay back if they receive subsidies from the federal government to help pay for health insurance.

Under the Patient Protection and Affordable Care Act, individuals who earn up to four times the federal poverty level will receive federal subsidies starting in 2014 to help them purchase health insurance, as is mandated by law.

“There is bipartisan agreement that the current system is broken, and AMA will work closely with policymakers on a long-term solution that helps physicians continue to care for seniors now and in the future,” said Wilson. “It’s clear that 2011 is the year to finally fix this problem, as the baby boomers begin relying on Medicare this January for their health coverage.”

The legislation also extends a payment mechanism that adjusts for geographic differences in the cost of providing medical care, provides exceptions for caps in cases where additional therapy services are deemed to be medically necessary, extends increased rates for ambulance services, and provides a 5% increase in payments for certain mental health services.