Congress Approves Legislation Temporarily Blocking Medicare Payment Reduction

In a last-minute effort before the holidays, a bickering Congress finally came together to pass a bill to extend the Medicare payment rate for the next two months, thus blocking a 27.4 percent payment reduction that was scheduled to go into effect on Jan. 1. President Obama now has signed the bill.

"Eleventh-hour legislation that fails to meet the needs of constituents is no way to conduct the nation's business," said AAFP President Glen Stream, M.D., M.B.I., of Spokane, Wash., in a prepared statement. "That is particularly true when millions of Americans' health and welfare are at stake. But 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 (SGR) formula for Medicare."

Congress passed the two-month Medicare physician payment patch as part of a larger tax bill that also extends other provisions for two months, including a federal payroll tax holiday and unemployment compensation.

House members approved a bill on Dec. 13 that would have provided a 1 percent increase in the Medicare physician payment rate for the next two years. But to finance the two-year fix, the House bill would have repealed or scaled back programs in the Patient Protection and Affordable Care Act, including the Prevention and Public Health Fund. This made the bill unacceptable to Senate Democratic leaders.

In response, the Senate passed a measure last week to extend the Medicare payment rate and other tax provisions for two months, but the Republican-controlled House rejected the Senate measure, saying it failed to provide an adequate extension of the federal payroll tax holiday and unemployment benefits.

However, under increasing pressure from Senate Republicans and the White House, the House finally agreed to a two-month extension of the Medicare payment rate and the other provisions contained in the Senate-approved legislation. The House and Senate approved the new measure by unanimous consent, which allowed the two chambers to approve the bill without recalling the legislators, some of whom already had left for a holiday break, for a recorded vote.

House and Senate conferees are expected to convene in January to work out differences in the just-approved legislation and to try to extend the Medicare payment patch and other bill provisions for at least a year.

But, according to Stream, "Americans are tired of short-term, insufficient answers to long-standing problems. Americans want a permanent solution. They want Congress to look beyond the next few months or the next year. They want health security. Instead, they got a bitter holiday gift -- an extra 60 days before health insecurity again sets in."

Stream called on Congress to "put aside partisan interests, repeal the SGR and put a sustainable payment system in place that helps rebalance primary care physician work with a 3 percent payment differential."

"It's time to establish health security for elderly and disabled patients, as well as the military families who depend on TRICARE," said Stream. "It's time to follow through on previous commitments to permanently end this annual -- and if history is an example, sometimes monthly -- ordeal of temporary patches that drive up the ultimate cost of a meaningful, sustainable solution."