Senate Again Fails to Approve Fix to 21% Cut; Payment Reductions to Begin

Janice Simmons, June 18, 2010

Physicians hoping to see a postponement at last of a 21% cut in Medicare and TRICARE reimbursements faced disappointment on Thursday as the Senate failed to pass a new "doc fix" amendment to the jobs bill (HR 4213). The Senate is not likely to vote on the provision again until next week.

Thursday was significant because it was the last day that the Centers for Medicare and Medicaid Services' contractors would hold claims so that the 21% reduction would not be removed from payments made to physicians for service claims provided on and after June 1. (June 1 was the deadline for the previous extension of the doc fix by Congress.)

While CMS is expected to cut 21% on fees starting with Friday claims, providers can expect to eventually get that cut amount back if Congress approves a sustainable growth rate (SGR) fix that is retroactive to June 1. CMS also is expected to release guidance on whether it will be giving physicians permission to waive small beneficiary co payment amounts linked with a retroactive fix.

However, that action is unlikely to appease many of the major physician groups who have become increasingly vocal for a fix to permanently drop the SGR formula.

The change to the SGR proposed this week in the Senate would provide a shorter timeframe for a payment raise than the proposal under consideration last week: With the latest version, a 2.2% raise was called for physicians through Nov. 30 of this year—rather than the 2.2% over 19 months proposed in an earlier amendment. The shorter period would create in part a less expensive jobs bill (which declined from a $140 billion package the previous day to $118 billion on Thursday).

The drop in cost, however, failed to sway Republicans for supporting the bill. The jobs bill was unable to get the needed 60 votes to avoid a filibuster on Thursday: Voting along party lines, the bill eventually was defeated 56-40. The House's jobs bill—which included a 19-month SGR postponement—was passed three weeks ago.

In comments made before the Senate vote, new American Medical Association President Cecil Wilson, MD, said that implementing the 21% cut in Medicare payments will impact seniors' healthcare" as "physicians are forced to make difficult practice changes to keep their practice doors open."

Referring to the six-month delay proposed in the latest amendment, Wilson said that "continued short term actions are creating severe instability" as physicians make decisions to "protect their practices from Medicare's volatility."

The American College of Physicians, in a statement, was critical that this was the third time this year that Congress considered short-term patches to stop the payment cut.

ACP said that it initially supported an approach proposed by Congress last month that guaranteed no cuts in payments for three years—as a more permanent system to Medicare updates was considered. It said, though, it will "continue to apply maximum pressure on Congress" to stop cuts "by enacting legislation that provides stable and predictable payments—with the goal of a permanent fix."

Janice Simmons Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at
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