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Doctors Livid After Congress Recesses Without Averting Pay Cut

By Jane Norman, CQ HealthBeat Associate Editor

March 26, 2010 -- Physicians reacted with anger on Friday after Congress left town without voting to block a scheduled 21 percent pay cut in Medicare reimbursement rates set to go into effect on April 1.

While it's highly unlikely the cuts would ever actually kick in, the reimbursement issue is key for the powerful doctor group, which endorsed the health care overhaul (PL 111-148) and was a prominent player in negotiations over its provisions.

"It is unconscionable for elected officials to play politics with seniors and military families who rely on them to preserve their ability to see the physician of their choice," said J. James Rohack, president of the American Medical Association, in a blistering statement issued shortly after the Senate adjourned for a two-week spring recess. Reimbursement rates under the military's Tricare program are tied to Medicare rates.

Rohack said Medicare beneficiaries should let their members of Congress know that "decisions made in Washington have real-world consequences and that their inability to take permanent action on this critical issue is unacceptable." This marks the second month in a row lawmakers have failed to agree on how to postpone the cut and it's causing "severe instability" for doctors and their patients, Rohack said.

Peter Ashkenaz, a spokesman for the Center for Medicare and Medicaid Services (CMS), said the government will do as much as it can under the law to avert the mandated payment cut, hanging on to Medicare claims until Congress comes back and can act.

"CMS is instructing its contractors to hold the payment of claims submitted for services delivered after April 1 for 10 business days — the maximum amount of time it is able to hold claims," Ashkenaz said. "This will ensure that if Congress acts when it returns, providers will not be hit by a payment reduction."

Cecil Wilson, president-elect of the AMA, appeared at a news conference celebrating the health care overhaul earlier this week and said afterward that the association is demanding a permanent solution for the payment problem rather than a continuing series of short-term postponements — though Republicans and moderate Democrats have rebelled at the cost of a long-term resolution. "No more patches and no more temporary fixes," Wilson said.

The reductions are mandated by what's called the sustainable growth rate formula, or SGR, which sets overall targets in order to hold down spending on Part B physician services. Payment rates are adjusted every year to reflect differences between actual spending and the target. Since 2002, spending has exceeded the target but Congress beginning in 2003 has raced to the rescue to avert the cuts.

The latest stalemate arose when the Senate was unable to complete action prior to the recess on HR 4851, a short-term extensions bill that would block the physician pay cut until May 1. The $9.2 billion bill also includes items such as extensions of long-term unemployment benefits and health insurance subsidies for the jobless. Democrats say it's emergency spending but Republicans, led by Sen. Tom Coburn, R-Okla., want the spending to be offset.

Senate Majority Leader Harry Reid, D-Nev., scheduled a vote on cloture on HR 4851 for April 12 at 5:30 p.m., when the Senate will have returned from its break.

Republicans and Democrats blamed each other in separate news conferences after the decision to put off action on HR 4851 or other solutions until mid-April. Coburn said senators agreed on a short-term extension that was fully offset by other spending, but it was rejected by Democrats.

"I think it would be a good idea for us to stay here and work this out," said Coburn. "Unfortunately, we chose not to do that. We chose not to work it out, not solve the problem because we didn't want to make difficult choices about where we cut spending and eliminate additions to the debt."

But Sen. Jack Reed, D-R.I., said unemployment in the United States constitutes an emergency situation. "Now, we all have to be concerned with the deficit, but selective attention to it is I think something we have to be a bit skeptical about," he said. "I mean, we have a decade of unfunded Republican proposals to cut taxes, provide entitlements under Part D of Medicare, fund two wars."

Reed said there was no point in attempting a cloture vote prior to the recess. "Doing the math, it was not going to be 60 votes there. And that is regrettable," he said. Lawmakers separately have been working on HR 4213, which would prevent the physician pay cut through Oct. 1 along with authorizing many other extenders, but differing House and Senate versions need to be resolved.

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