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Senate Passes Medicare Doctor-Payment Extension

By Richard Rubin, CQ Staff

June 18, 2010 -- The Senate passed a six-month fully offset "doc fix" bill by voice vote on Friday after extracting it from a larger tax and benefits package that has been stalled for months.

The move solved one messy legislative problem, but left other big issues lingering.

"This is good news," said Senate Finance Chairman Max Baucus, D-Mont. "Let's savor something."

The $6.5 billion bill would prevent a 21 percent cut to doctors who receive reimbursements from Medicare and increase their pay by 2.2 percent. A previous short-term extension expired June 1, and the administration has prevented the cut from taking effect until now.

The Medicare bill must still pass the House, which is not scheduled to return until the evening of June 22. House Democratic leadership aides said lawmakers would study the bill and the offsets before deciding how to proceed.

The bill was partially offset by changes to changes to pension funding rules that would reduce required payments by companies, and some of that language may cause concern in the House. Another offset would prevent hospitals from submitting separate Medicare reimbursement claims for inpatient care and outpatient care provided within three days of a hospital admission.

The doc fix measure is exempt from the pay-as-you-go law, but many lawmakers, expressing concern over the federal deficit, had called for the provision to be offset.
The passage of the doc fix bill decoupled it from the broader bill. Senate Democrats came up four votes short Thursday evening in their attempt to invoke cloture on the $118 billion measure, which also would extend unemployment benefits, revive expired tax breaks and add a grab bag of spending on items such as summer jobs, affordable housing and agricultural disaster assistance.

The fate of that bill, particularly without the doctor language, remains up in the air.

Baucus said he hoped to build on the success of the doctors' bill as he tried to salvage the rest of the package. But it was still unclear whether the Senate would return to consideration of the bigger bill next week.

"We'll see what adjustments can be made by then," Baucus said.

The 21 percent pay cut for physicians who treat Medicare patients took effect Friday. The Centers for Medicare and Medicaid Services directed contractors Friday to begin submitting claims dating back to June 1, saying it could no longer delay the payment process in anticipation of Congressional action.

Should lawmakers in both Houses extend a payment fix, "we are prepared to act expeditiously to make the appropriate changes to Medicare claims processing systems," the agency said in a statement.

Doctors have been clamoring for a long-term change to the reimbursement formula, and American Medical Association president Cecil B. Wilson complained about a short-term solution.

"The Senate has been debating this issue for weeks and the latest proposal is a six-month delay of the cut," Wilson said in a statement. "Delaying the problem is not a solution. Continued short-term actions are creating severe instability that harms seniors as physicians make decisions to protect their practices from Medicare's volatility. Continuing down this path just slaps a Band-Aid on a problem that needs urgent surgery."

Edward Epstein and Emily Ethridge contributed to this story.

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