House Joins Senate in Delaying Medicare Pay Cut to June 1

April 15, 2010

April 15, 2010 — The House tonight voted 289 to 112 to extend the effective date of a 21.2% Medicare pay cut from April 1 to June 1 after the Senate granted its approval earlier today.

The measure, awaited anxiously by physicians, was signed into law later in the evening by President Barack Obama.

The postponement of the Medicare pay cut is part of a bill that also extends expired unemployment compensation benefits and subsidies for health insurance premiums under the COBRA program for out-of-work Americans. Earlier this year, the House passed a similar bill calling for a 1-month extension; it would have delayed the reduction in Medicare reimbursement until May 1. The Senate added an extra month to the bill’s provisions, forcing the House to reconsider the amended version.

For months, organized medicine has warned that if the massive pay cut became a reality, many physicians would stop seeing seniors as well as military families covered by TRICARE, which bases its fee schedule on Medicare. Congressional Democrats have laid plans to possibly extend the effective date of the pay cut to October 1 and even push it out to sometime in 2015, freezing Medicare rates in the meantime.

Medical societies, however, want more drastic action. They have urged Congress to replace the sustainable growth rate formula used by Medicare to set physician reimbursement with a formula they consider more equitable.

Uncertainty About Medicare Rates Has Already Affected Patient Care

Today’s Congressional action went beyond last minute. Democratic lawmakers had tried to avert the 21.2% pay cut before it took effect April 1, but partisan gridlock in the Senate prevented that from happening. Senate Republicans mounted adamant opposition, arguing that Democrats should have found a way to offset the cost of the bill instead of adding to the federal deficit.

Democrats then looked toward another deadline — Wednesday, April 14, the tenth business day of the month. That date was important because the Centers for Medicare and Medicaid Services (CMS) had instructed its carriers to hold physician claims with April service dates for the first 10 business days of the month. If Congress had managed to postpone the effective date of the cut by the end of Wednesday, carriers could have reimbursed all those suspended claims at the old, higher rate. However, Congress missed that deadline, too.

After Wednesday, those suspended claims started to enter the claims processing pipeline, meaning carriers would reimburse them according to the reduced Medicare fee schedule. However, CMS announced before the votes in the Senate and House today that any claims processed at the reduced rate would be reprocessed at the higher rate. Claims with physician charges at or above the higher rate would be automatically reprocessed.

All the uncertainty over the past few weeks about how much Medicare would pay physicians took its toll, according to Neil Kirschner, PhD, a senior associate in regulatory and insurer affairs for the American College of Physicians (ACP). Dr. Kirschner told Medscape Medical News that some ACP members were asking their Medicare patients to postpone making appointments except in the case of an emergency until the payment situation became clear.

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