Medicare Doc Fix Approved by House


Medicare and Legislation

 

Legislation to postpone Medicare reimbursement reduction for physicians was approved by the house.  In a bipartisan vote, the 23% reduction was scheduled for December 1st 2010 to January 1st, 2011.  The legislation was enacted and Obama’s signature was needed.  Additional legislation would be needed for the postponing of a 25% cut scheduled for New Years.  The House also introduced a bill that would postpone further cuts until January 2012.  The Congressional Budge Office noted that it would cost up to a billion dollars over a decade if the cut is delayed until Jan 2011.  That billion dollar cost will be offset with savings from other Medicare reimbursement cuts.  Those cuts included multiple outpatient therapy rates which included speech and physical therapy.

 

Medicare Overspending and Rate Reductions

 

Medicare and DoctorsTurning away from deficit spending, Congress is looking for money in cuts and hikes in revenue to offset Medicare rate reductions.  The AMA stated that by extending cuts to Medicare up to Jan 2012, the Treasury will have to pay out approx. fifteen billion.  By postponing physician pay cuts, Congress is attempting to produce a fix for the Medicare reimbursement problem.  This would amount to revising or removing the sustainable growth rate formula.  This formula was originally enacted by Congress in ’97 to control Medicare spending at the time.  It was meant to controls the costs so that Medicare could recover what was overspent.  The formula set a yearly target for physician services payment.

 

The Delayed Doctor Reimbursement Cuts

 

Since 2003, doctors have had to face cuts based off of the formula each year but have never experienced one because Congress has delayed every one of them.  Many in the medical community consider the formula as seriously flawed.  The very fact that a physicians practice grows much faster than the gross domestic product is proof enough that the formula can’t work.  There are some that are campaigning to have doctor’s reimbursement attached to the MEI or Medicare Economic Index.  This is the index that monitors inflation in comparison to actual costs of a practice which is a much more accurate formula.

The problem will continue to escalate each year until Congress can put in a permanent fix.  It will take further support from the medical community as well as bi-partisan voting to further the agenda of fixing Medicare.

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