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Two-Month Physician Payment Patch Completed, Signed by President

By John Reichard, CQ HealthBeat Editor

December 23, 2011 – The Senate, followed by the House, worked together to swiftly approve the payroll tax legislation blocking the 27 percent Medicare doctor payment cut scheduled for Jan. 1. President Obama signed the measure.

The physician payment patch lasts just two months. The measure (HR 3765) also extends for two months the following programs that would have expired at the end of 2011: the section 508 program to reclassify hospitals into different geographic regions to adjust payments based on wages; the "Medicare work geographic adjustment" floor; the exceptions process for the rehab therapy cap; certain physician pathology services; ambulance add-on payments; mental health add-on payments; outpatient "hold harmless" payments; minimum payments for bone mass measurement; the "Qualifying Individual" program to lower Medicare out-of-pocket costs; the Transitional Medical Assistance program; and the temporary assistance for needy families program.

American Medical Association President Peter W. Carmel issued a statement saying that Congress "now has to enact a real and fiscally responsible solution to this sorry cycle of scheduled cuts and short-term patches that compromises access to care for patients and drives up costs for taxpayers."

American Academy of Family Physicians President Glen Stream said that "last-minute, inadequate legislation is exactly what Congress has done with passage of an absurdly short reprieve from the 27.4 percent cut in physician payment mandated by the deeply flawed sustainable growth rate formula for Medicare."

Like Carmel, Stream called for a permanent overhaul of the Medicare payment formula.

Senate Majority Leader Harry Reid, D-Nev., said he wants to accomplish that, too. "I would hope to do something final to take care of this doc fix," said Reid.

But with legislation to get that done estimated to require $300 billion or more in offsetting spending cuts, revenue increases, or some combination thereof over a period of 10 years, that's going to be a tall order for lawmakers next year.

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