Congress Approves Freeze on Medicare Doc Payments

Congress today voted to approve a one-year freeze on Medicare physician payments to avoid a sharp rate reduction that was scheduled to go into effect on Jan. 1. Before the vote, President Obama had called the freeze “an important step forward to stabilize Medicare.” He is expected to sign the legislation.

Doctors had been facing a 25 percent cut in reimbursement rates for treating Medicare patients. The new “doc fix,” which is estimated to cost $19 billion, will be paid for through funding under the health care reform law.

The one-year deal was hailed by both AARP and physicians groups. “Stopping the steep 25 percent Medicare cut for one year was vital to preserve seniors’ access to physician care in 2011,” said Cecil B. Wilson, president of the American Medical Association. The first boomers turn 65 next year, “adding urgency to the need for a long-term solution before this demographic tsunami swamps the Medicare program,” he said.

“Seniors and the doctors who care for them deserve the stability of a Medicare system that does not require Band-Aid fixes each year,” said A. Barry Rand, AARP’s chief executive officer. “We look forward to working with the new Congress next year to put an end to the annual patches and give seniors the peace of mind they deserve.” More than than 100,000 AARP members had contacted Congress asking lawmakers to prevent the payment cut, he added.

The new one-year freeze follows a series of short-term fixes that have blocked the threatened cuts repeatedly over the past eight years.

The cuts are required because of legislation passed in 1997 that tied Medicare funding to a formula based on economic growth. Typically when the deadline for the cuts looms, Congress votes to block them. Then several months later the process repeats without lawmakers addressing the underlying problem of the formula. So far, the cuts have been blocked 10 times in the past eight years, including four times this year.

For the 46 million Americans in Medicare, the threatened pay cuts had raised the possibility that more doctors would turn away Medicare patients.

“Recent AARP surveys show that more than 80 percent of our members are concerned that if this pay cut goes into effect they could lose their doctors," Rand wrote in an earlier letter to Congress urging passage of a yearlong fix. "Our research also shows that our members believe Congress has a responsibility to keep doctors in the Medicare program by providing doctors with a stable payment system."

The legislation also extends for one year a Medicare program that pays Part B premiums for low-income beneficiaries who can’t otherwise afford them. The program was due to expire Dec. 31, said Joe Baker, president of the Medicare Rights Center. “At a time when the financial security of an increasing number of Medicare consumers is uncertain, programs [like this] have become essential,” he said.

Candy Sagon writes about health issues for the Bulletin.