Congress Passes Budget Bill That Cuts Medicare Pay in 2025

October 30, 2015

Congress has passed a 2-year budget deal that solves a laundry list of fiscal problems, but creates one for physicians by cutting their Medicare reimbursement in 2025.

The House passed the bipartisan measure on October 28, and the Senate followed suit early this morning. President Barack Obama has promised to add his signature.

The measure funds the government for 2 more years, averting a shutdown, and raises the debt ceiling through March 2017, averting a default. It allows military and domestic spending to exceed previously set budget limits called sequestration by $80 billion, some of which could make its way to such vital agencies as the National Institutes of Health and the Centers for Disease Control and Prevention. Medicare beneficiaries are spared a dramatic spike in their monthly Part B premiums.

To avoid deficit spending, Congress devised a number of budgetary offsets. One of them was extending an annual 2% reduction of Medicare provider reimbursement 1 more year, into 2025. The pay cut, created by the sequestration provisions of the Budget Control Act of 2011, was supposed to expire in 2021, but Congress over time has tacked on more years to free up federal dollars to tidy up its books.

Organized medicine has criticized this savings gambit before, and it did so again this week. "We strongly urge members of Congress to stop using this tool to offset other spending increases," Steven Stack, MD, president of the American Medical Association, said in a news release.

Organized Medicine "Doesn't Frighten Congress Too Much"

One veteran executive in organized medicine said he was not surprised that Congress did Medicare beneficiaries a favor by holding down their premiums while shrinking physician reimbursement.

"It was easier to go after the doctors," said Jack Lewin, MD, president and chief executive officer of the Cardiovascular Research Foundation, in an interview with Medscape Medical News. "Patients vote. Physicians and other clinicians are not in sufficient numbers to worry lawmakers."

This relative lack of clout also applies to organized medicine, said Dr Lewin. "It doesn't frighten Congress too much."

Dr Lewin, formerly chief executive officer of the American College of Cardiology and the California Medical Association, called the extension of the Medicare cut bad public policy.

"It will be painful for physicians, and especially for primary care physicians and those in private practice who can't insulate themselves from rising business costs," he said.

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