House Accepts Two-Month Delay in Medicare Physician Pay Reductions

Published Saturday, December 24, 2011 7:00 am

UPDATE:   On December 23, the House Republicans reversed their position taken earlier this week and agreed to the bill passed by the Senate on December 17th to avert the Medicare physician payment reduction and extend the expiring payroll tax reduction and unemployment insurance benefits for two months. President Obama has signed the legislation into law. This two-month delay will allow time for both Houses of Congress to resolve their differences over a longer-term bill when they return from their holiday break next month.  
AAGP will continue to provide updates on the status of this issue as events continue to unfold.

December 22, 2011: The threat of a 27.4 percent cut to Medicare physician payments on January 1 became more real on December 20th, after the House of Representatives voted (229-193) to reject a Senate-passed bill that would have averted the pay reduction and extended an expiring payroll tax reduction and unemployment insurance benefits. The net result of that action was to leave 2012 Medicare payment rates in limbo.

H.R. 3630, as originally passed by the House on December 13, by a vote of 234-193, would have provided Medicare physician payment updates of one percent a year for two years, followed by a return to the current negative trend line produced by the sustainable growth rate (SGR) formula. However, as a result of disagreements over financial offsets and other policy issues unrelated to the SGR, the legislation could not garner enough votes to pass the Senate. Consequently, on December 17th, by a vote of 89-10, the Senate passed an amended version of that bill that would extend all the expiring provisions − including the current Medicare physician payment rates − for two months. The rationale for the short-term extension was to avoid disruptions on January 1 and provide time for further negotiations on the two versions of the bill.

Following the Senate's action, a large number of House Republicans expressed strong opposition to the two-month extension, and the December 20th vote then occurred to disagree with the Senate-passed bill and request a conference to work out their differences in the two bills. The House action was intended to put pressure on Senate Democrats to reconvene and meet with the House over the legislation. However, Senate Majority Leader Harry Reid (D-Nevada) has stated that he will not agree to negotiations until the House approves the Senate-passed bill that had been negotiated by Senate leaders from both parties.

At this time, it does not appear likely that the outstanding issues will be resolved by January 1. (Congress is currently in recess. The House is scheduled to return to Washington on January 17, and the Senate is scheduled to return on January 23. However, there are reports that the House may move the date of its return up to the first week of January.)

On December 19th, the Centers for Medicare and Medicaid Services (CMS) announced that it would hold claims for 2012 physician services for up to 10 business days − until January 17− to avoid processing payments at the lower rate. After that date, claims will be processed on a first-in, first-paid basis at the reduced rates until the situation is resolved.

Throughout this year, bicameral and bipartisan support has been expressed in Congress for permanently addressing the Medicare physician payment crisis. And yet, once again, physicians and their patients find themselves confronting uncertainty and instability. It is long past time for Congress to act decisively and protect access to care for older adults − they and their physicians deserve better. AAGP will continue to work with other Medicare physician and health care provider organizations in advocating for a permanent solution to the Medicare payment system problem. In the meantime, AAGP will also continue to work to avert or rollback the reductions slated to go into effect on January 1.

AAGP will provide additional updates on the status of the 2012 Medicare payment rates as events unfold.

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