Congress to delay Medicare pay cut until April 30

posted 03.18.10

For the third time in the last four months, congressional lawmakers have postponed a scheduled 21.2 percent cut in physician payment through the Medicare program. The House passed a bill that provides another one-month extension of the current Medicare physician payment rate, averting the payment reduction scheduled to take effect on April 1. The Senate is also expected to pass the bill that puts off the cut until April 30 to give Congress more time to pass a longer-term payment patch.

The Senate already passed a bill that would provide a payment fix until Oct. 1, but it included offsetting reductions in spending and increases in taxes that are included in the larger health reform bill, AAFP Director of Government Relations Kevin Burke told AAFP News Now. Because Congress cannot use the same offsets in both bills, the House chose to implement another one-month patch to give lawmakers more time to find new budget offsets to pay for provisions in the bill.

The persistent threat of a cut stems from the program’s sustainable growth rate, or SGR, a formula designed to control Medicare spending by reducing fees to cover cost overruns in previous years. Since its inception, the formula has proven to be unworkable, forcing lawmakers to avert the cuts year after year, thereby compounding the size of the threatened reduction with each delay.

Physician organizations have consistently called for a permanent fix to the SGR to no avail. Repealing the SGR would cost approximately $240 billion.

Family medicine leaders including AAFP President-elect Roland Goertz, M.D., of Waco, met with administration officials and lawmakers on March 2 and 3, continuing their steady engagement in high-level discussions on health care reform and Medicare payment issues.

“I appreciate the opportunity we have had to try and influence the health care reform debate,” Goertz said in an AAFP News Now article. “We have never had that opportunity before, and to be there at the highest level of discussion is what we have worked so hard for.”

To make sure members understand the complex nature of the SGR, what it is and why it doesn’t work, AAFP has posted a question-and-answer document, and a detailed SGR analysis on the Connect for Reform page of www.aafp.org.

“We know there are many other issues legislators are grappling with right now—from health care to jobs to the budget, and all have become increasingly political,” says the document, according to a News Now article. “Nevertheless, a 21 percent pay cut to our members and the negative effect it will have on our patients at any point are unacceptable.”

In other congressional news, the House is scheduled to vote on the health care reform bill on Sunday. Stay tuned for more coverage of actions surrounding this bill.