House Approves Permanent Physician Medicare Fix; Senate’s is Short-Term

The U.S. House of Representatives yesterday passed legislation to permanently eliminate the 21% cut to physician Medicare payment rates scheduled for next year. The $210 billion bill, the cost of which is not offset, would provide a 1.2% update to rates in 2010 and revise the currently flawed Medicare payment update formula for physicians--the sustainable growth rate formula.

Originally included as part of the House’s health reform bill, it was removed from the larger package because of its high cost and the necessity of ensuring the cost of the whole reform bill was offset.

Passage of freestanding comparable legislation in the U.S. Senate is unlikely, given objections within the Democratic caucus to passing the costly legislation without an offset. However, the Senate’s reform bill released yesterday includes a one-year reprieve from the pending Medicare physician payment cut, replacing the cut with an update of 0.5% for 2010. The short-term cost of the fix is offset in the Senate’s reform bill.

While it remains unclear the character of any potential legislative fix of the cut, HANYS expects Congress will intervene to avert the reduction. Contact: Kevin Krawiecki