Medicare to cut physician pay by 21.3 percent unless Congress acts

posted 05.27.10

Physician fees for Medicare services will be slashed by 21.3 percent on June 1 unless both houses of Congress approve the latest in a series of measures to stave off the scheduled cut. While AAFP and other physician organizations have repeatedly called for a permanent fix to the flawed formula used to determine Medicare fees, the estimated $200-billion price tag over 10 years has made a permanent fix politically unpalatable for lawmakers.

Legislation that would postpone the cut is contained in a package of “tax extenders” including an extension of unemployment benefits and COBRA benefits. Earlier this week, House Democrats were pushing to delay the cut for three years and implement some small increases in the interim, but late on May 26, they scaled back their plan because the cost was still too high to pass.

The latest version of the patch would avert the cut for 19 months, or until Jan. 1, 2012, but with the current political climate in Washington, D.C., it is possible Congress won’t pass anything before its 10-day Memorial Day recess set to begin on Friday.

Most recently, Congress failed to pass an extension by the last deadline on April 1, so the Centers for Medicare and Medicaid Services stopped processing claims for two weeks in hopes lawmakers would pass something before claims were processed at the new rate. Congress then approved a measure freezing rates until June 1. While physicians were not subjected to a reduction in fees, they did not receive payment during those two weeks, causing significant cash-flow problems for many practices.

"Unless Congress acts to stop the 21 percent Medicare pay cut to physicians, even more elderly and disabled Americans and military families will find themselves holding a Medicare or TRICARE card that has little or no value," said AAFP President Lori Heim, M.D., at a May 26 press conference. The quote was published in an AAFP News Now story, which reports that AAFP joined other leading primary care organizations and the AARP in calling on Congress to fix the Medicare physician payment formula.

Congress had not passed the measure as of the publication of this news story. Stay tuned for updates.