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Senators Agree on One-Month Extension of 'Doc Fix'

By Jane Norman and Emily Ethridge, CQ Staff

November 18, 2010 -- The Senate on Thursday evening passed a one-month extension of the current Medicare physician payment rates in an effort to avert a 23 percent cut scheduled to take effect Dec. 1.

The measure (HR 5712), passed by unanimous consent, represents an agreement negotiated by Finance Chairman Max Baucus, D-Mont., and ranking member Charles E. Grassley, R-Iowa, that would cost $1 billion over 10 years and would be fully offset by savings from within the Centers for Medicare and Medicaid Services (CMS) physician payment system, according to a summary of the legislation.

"Working together, we have set a path to ensure seniors and military families can continue to get quality health care," Baucus and Grassley said in a statement released Thursday afternoon. "This agreement makes certain that seniors and military families can be confident they will be able to see a doctor and get the medicines they need."

The measure now goes to the House, which has adjourned for the week. House Majority Leader Steny H. Hoyer, D-Md., announced Thursday evening that the chamber would take up the measure Nov. 29.

Baucus and Grassley said the one-month extension would provide time for Congress to work out a deal on a longer extension in December. They said they are working to secure "a mutually agreeable way to pay for the yearlong cost of the physician formula as well as other extenders."

Baucus has suggested that a yearlong proposal could be rolled into a larger Democratic tax package that would address the expiring 2001 and 2003 tax cuts (PL 107-16, PL 108-27). Details of the package are likely to be negotiated when President Obama meets with leaders of both parties Nov. 30.

The cost of the one-month extension would be paid for using savings from a new CMS policy that reduces Medicare payments for multiple therapy services provided to patients in one day. Finance Committee aides said the proposal would also provide relief to therapists by shrinking that reduction from 25 percent to 20 percent.

Baucus and Grassley said the 20 percent reduction would still provide savings to the system of $1 billion over 10 years.

"The savings would not be distributed on a budget-neutral basis as in the final rule but would be used instead as savings to offset the additional one month of the physician payment update," according to the bill summary.

Although lawmakers of both parties have said they wanted to avert the cuts for a much longer period of time, they have been unable to reach agreement on how to pay for that.

Physician and patient groups have advocated a 13-month patch to block the cuts, but that could cost between $17 billion and $20 billion. Parties have so far been unable to agree on acceptable offsets for any long-term change, and they are unwilling to pass such a costly measure without finding spending reductions elsewhere.

Doctors have threatened to stop taking new Medicare patients if the cuts go through, and experts warned that the situation would undermine the health care program for 46 million elderly and disabled individuals.

Meanwhile, House Democrats introduced a measure Thursday that would provide for a 13-month extension of the adjustment. The new bill does not provide an offset.

"There is no question that Congress needs to address the [issue] permanently," House Ways and Means Chairman Sander M. Levin, D-Mich., said. "This legislation is a good and necessary step to ensure that America's seniors, individuals living with disabilities and our military families continue to have access to the doctors they know and trust."

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