May 28, 2010

On Friday the House of Representatives passed a scaled back version of H.R. 4213 which contains a provision that would prevent a looming 21 percent cut to Medicare physician reimbursements on June 1. Now the bill goes back to the Senate but Congress does not reconvene until June 7.

H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010 would postpone that cut until 2012. In the meantime the bill proposes providing a 2.2 percent increase in Medicare payment rates for the rest of 2010 and a 1 percent increase for 2011, reported the House Committee on Ways and Means. In 2012 the payment rates would go back to the current law levels, meaning physicians would be facing significant cuts again. This provision is estimated to cost $22.9 billion over 10 years. 

The skyrocketing national debt made it extremely difficult to secure the votes needed to pass the bill in the House. H.R. 4213 has been ping ponging between the House and Senate. The House passed it on Dec. 9 and sent it to the Senate on Dec. 10. It came out of the Finance Committee on Mar. 1 and the Senate passed it with amendments on Mar. 10 and it went back to the House on Mar. 18.

This latest proposal to delay Medicare reimbursement cuts is a compromise from a provision being discussed a week ago which would have provided a five-year fix to the physician payment formula for Medicare called the sustainable growth rate (SGR). Congress established the SGR formula in 1997. Based on that formula whenever a physician’s costs grow faster than the economy, Medicare reimbursements would be reduced. But legislators have continually delayed the cuts.