House issues six-month reprieve on Medicare cuts

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The U.S. House of Representatives approves a six-month stay in a 21 percent cut to Medicare reimbursement rates for physicians.

Nearly a week after a 21 percent cut to the Medicare reimbursement rate for doctors went into effect, the U.S. Congress voted to stop the cut for another six months.

The Senate approved a stay to the rate cut June 17 but killed its version of an employment-stimulus package, prompting sharp criticism from House Speaker Nancy Pelosi (D.-Calif.) over the ensuing weekend. After a brief face-off with Senate Majority Leader Harry Reid (D-Nev.), however, the House last night approved the measure on a 417-1 vote, The Associated Press reported. The lone dissenter was Rep. George Miller (D-Calif.). The measure now goes to President Barack Obama, who called the 21 percent cut “unacceptable” and said he’s pleased at the House vote — with reservations.

“A 21 percent pay cut to physicians’ payments would have forced some doctors to stop seeing Medicare patients — an outcome we can all agree is unacceptable,” Obama said in a statement. “We should also agree, as I’ve said in the past, that kicking these cuts down the road just isn’t an adequate solution to the problem. The current system of recurring cuts and temporary fixes was passed into law more than 10 years ago. It’s untenable.”

Pelosi, who earlier said she saw no reason to pass the rate cut stay outside of a larger jobs bill, called the bill that passed “totally inadequate,” according to the New York Times.

“When [the Senate] sent this very, very slim reed of a piece of legislation over to us, which wasn’t even really that well written,” Ms. Pelosi said, “this was totally inadequate. Members said, ‘No, we have to send something back that is bigger, but let’s see what they can do on unemployment.’ Well, it is clear they are not able to do anything this week.”

House passage was delayed for a few days while Pelosi and Reid haggled over the jobs package, which looked unlikely to pass Senate muster. The imbroglio is the latest, most severe symptom of a financial infection Medicare contracted in 1997, when Congress passed a deficit reduction bill mandating a so-called “sustainable growth rate.” Billed as a tweak aimed at saving a few billion dollars, the growth rate formula instead drove sharp cuts to Medicare reimbursement rates, already 25 percent to 35 percent below market rates.

Instead of fixing the formula,Congress passed a series of temporary fixes until the healthcare reform push last year. Democrats’ efforts to correct the problem — estimated to cost $300 billion — were shot down during the extended wrangling over the reform act.

A 10-year freeze to the reimbursement formula, which would forestall further rate cuts, would cost about $276 billion, according to a Congressional Budget Office estimate (PDF).

Doctors were already abandoning Medicare in ever-increasing numbers, even before the largest-ever cut June 18. That’s expected to cost millions after the Centers for Medicare and Medicaid Services waiting weeks to reimburse doctors for an estimated 50 million claims, hoping for another rate cut reprieve. CMS estimates that, at 30 cents each to process, the first wave of claims processing would cost about $15 million if the six-month stay ever sees the light of day, according toPolitico.

The American Medical Assn. president Dr. Cecil Wilson slammed Congress in prepared remarks, citing the long record of votes to put off rate cuts, including four this year alone.

“Delaying the problem is not a solution,” Wilson said. “In December, the Medicare physician payment cut will be a whopping 23 percent, increasing to nearly 30 percent in January. Congress is playing a dangerous game of Russian roulette with seniors’ health care. Sick patients can’t wait. Congress must replace the broken payment system before the damage is done and cannot be reversed.”

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