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President Signs Physician Pay Bill, But Unhappiness Lingers

By Jane Norman, CQ HealthBeat Associate Editor

June 25, 2010 -- President Obama signed a bill into law early Friday that prevents a 21 percent pay cut in Medicare physician reimbursements, bringing a conclusion—for now—to a stalemate over the level of government payments to doctors.

"I'm pleased that Congress has acted to ensure the security of our seniors' health care," Obama said. "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."

The Senate approved the stand-alone bill (HR 3962) by voice vote June 18 and the House cleared it Thursday. The measure postpones the cut for doctors until Nov. 30, instead providing a 2.2 percent pay increase. The so-called doc fix had been part of a broader tax break and social spending package (HR 4213) but congressional leaders extracted it when that measure stalled.

The increase is retroactive to June 1, when a previous short-term measure to prevent the pay cut (PL 111-157) expired. The Centers for Medicare and Medicaid Services issued a statement that the agency has directed its claims contractors to stop processing claims with cuts and temporarily hold all claims for June 1 and later until the pay increase is tested and loaded into the computer system. Claims will be reprocessed as soon as possible, CMS said.

Nancy-Ann DeParle, head of the White House Office of Health Reform, said in a blog post on the White House website that the pay increase is the highest for doctors under the Medicare schedule since 2001.

"The bottom line: With today's signings, doctors won't need to worry about a drastic pay cut, and seniors can rest assured that the care they need will be there when they need it," DeParle wrote.

But the American Medical Association expressed little joy over enactment of the law. The group had lobbied hard for a permanent fix to the reimbursement formula and complained about repeated delays in action on the pay cut this year. AMA President Cecil Wilson called it a "very temporary" fix that doesn't solve a "Medicare mess" created by Congress.

"In December, the Medicare physician payment cut will be a whopping 23 percent, increasing to nearly 30 percent in January," he said. The formula developed by Congress governing physician payments calls for the increased cuts, though cuts in the past have been averted.

"Congress is playing a dangerous game of Russian roulette with seniors' health care," Wilson said. "The baby boomers begin entering Medicare in six months, and if the physician payment problem isn't fixed, these new Medicare patients won't be able to find a doctor to treat them."

AARP, which represents seniors, agreed that the problem hasn't gone away. "The short-term Band-Aid passed tonight gives little reassurance to the 46 million Americans in Medicare who need reliable access to their doctors," said association Vice President Nancy LeaMond. "The time for Congress to find a long-term physician payment solution is far past due."

Members of Congress were reluctant to reverse the pay cut without an offset in spending, so the bill's $6.4 billion cost is fully paid for—partly by prohibiting health care providers from submitting separate payment claims for outpatient services provided within three days of a related hospital admission.

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