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Obama Administration to Back 13-Month Doc Fix

By Jane Norman, CQ HealthBeat Associate Editor

November 8, 2010 — The Obama administration on Monday will throw its weight behind a 13-month postponement of looming Medicare physician payment cuts while lawmakers work on a long-term fix.

Health and Human Services Secretary Kathleen Sebelius, in remarks prepared for delivery late Monday afternoon to the Association of American Medical Colleges, said the administration is committed to working with physicians to avert scheduled cuts.

"That starts with preventing the 23 percent cut in Medicare payments to doctors that's scheduled to take effect at the end of the month," Sebelius said in the prepared remarks, obtained by CQ HealthBeat. Such cuts could force doctors out of the program and jeopardize the care of seniors, she said. An additional 1.0 percent cut is slated to go into effect Jan. 1.

"The American Medical Association has proposed a 13-month extension," she said. "And I hope that Congress will act quickly to pass it so that our doctors and seniors can have some peace of mind while we work on a long-term fix."

However, she did not specify in her remarks where Congress should look for funds to pay for either the 13-month fix or a long-term remedy—a stumbling block that has kept lawmakers from reaching agreement on past proposals. The 13-month solution would cost an estimated $17 billion to $20 billion while a long-term fix would cost $300 billion to $400 billion over 10 years.

Sebelius noted that at a Nov. 4 Cabinet meeting, President Obama "stressed that preventing these potentially disastrous cuts must be one of our top priorities." The single biggest step to strengthen Medicare is to ensure the physician payment cuts don't go into effect, she said.

In a news conference Monday, American Medical Association (AMA) President Cecil B. Wilson said the physicians' group was "pulling out the stops" to persuade lawmakers to postpone cuts for 13 months during the lame duck session, during which time it could work out a permanent solution. The group published an ad in USA Today today featuring seniors, a veteran, and an active duty military members calling on lawmakers to prevent a disruption in care, which Wilson said will also run in Washington, D.C. publications next week when Congress reconvenes.

Previously, the AMA had reported that one in five physicians were limiting the number of Medicare patients in their practices because of concerns about a dramatic reimbursement cuts.

Medicare's sustainable growth rate (SGR) formula, mandated by law, triggers bigger and bigger doctor payment cuts as payments to doctors climb. Lawmakers have been scrambling for years to avert them.

To block pending cuts both political parties have piled the cost onto the deficit, but Republicans who will take over control of the House in January are leery. They want to explore ideas for a long-term fix that would require offsets elsewhere in the budget.

The cuts to doctor payments produced by the SGR formula have expanded not only because physician payments have exceeded yearly targets, but also because the costs of short-term legislative patches to block the cuts have not been offset with tax increases or cuts elsewhere in the federal budget.

The AMA long has sought a permanent fix, but that wasn't included in the health care overhaul, much to the distress of many doctors and state medical associations.

The administration and Democrats have faced intense criticism over the health care law during the campaign leading up to the midterm elections and can ill afford the uproar from seniors and the health care community that would result if the Medicare cuts were enacted.

"As the President has said many times, we will ultimately need a permanent fix, so that the livelihoods of the hard-working doctors who care for seniors and people with disabilities are no longer subject to politics," Sebelius said.

"But in the meantime, we don't want any doctor to be stuck in a limbo where they don't know week to week how much they'll be paid for the services they deliver. That's why we're urging Congress to act now to make sure that you can continue to provide the high quality care our seniors depend on every day."

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