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Congress Passes Temporary Medicare “Doc Fix”

Updated Friday, June 25, 11:23 a.m.

Congress on Thursday passed a temporary measure that will avert a 21 percent pay cut to doctors who treat Medicare patients — but the fix will only last for six months.

The Senate passed the bill last week. It had originally been part of a larger measure that would also have extended unemployment benefits, but the Senate separated the two after they could not find the votes for the larger bill. The House grudgingly approved the smaller measure Thursday, after holding out hope that the Senate would pass more comprehensive legislation.

House Speaker Nancy Pelosi called the smaller bill “totally inadequate.” But Congress ran out of time to pass a larger measure, as a temporary delay to Medicare claims processing had expired, and Medicare was set to begin paying claims at the lower rate.

President Obama urged Congress to begin working on a permanent fix: “Kicking these cuts down the road just isn’t an adequate solution to the problem,” he said.

For more on finding a permanent solution to the Medicare payment issue, listen to health correspondent Betty Ann Bowser’s conversation with Commonwealth Fund president Karen Davis below.

Updated June 18, 2010

The Senate on Friday passed a bill that will delay for six months a 21 percent pay cut to doctors who treat Medicare patients.

The $6.4 billion bill will prevent a cut to the Medicare reimbursement rate that was set to begin Friday.

The move is the latest step in the ongoing story of the Medicare “doc fix,” which goes back more than a decade. Here’s how health correspondent Betty Ann Bowser described it in a recent blog post:

In 1997, Congress adopted something called the “Sustainable Growth Rate” — a formula that was supposed to keep Medicare payments on track with growth in the economy. But a rapid escalation in health care costs in recent years has meant that those costs have grown faster than the economy as a whole — so the formula ends up each year calling for a cut in Medicare payments to doctors.

Rather than making a budget-busting permanent change to the formula, Congress has instead passed a series of temporary “doc fix” bills to delay the rate cut — a move unpopular with many health policy analysts, according to a recent Politico article.

The House passed a doc fix last month as part of a larger jobs bill, but a similar bill failed to pass the Senate. With time running out, the Senate passed a six-month fix by itself Friday afternoon. But it won’t go into effect right away. The House has already adjourned for the weekend, and will have to take up the Senate’s bill when it returns next week.

Bowser spoke earlier this week with Karen Davis, the president of the health policy foundation the Commonwealth Fund, about why she believes it’s important to find a permanent solution to the Medicare payment, and why that solution might involve broader payment reforms.

“Certainly there ideas that we can learn from other countries, and there are provisions in the Affordable Care Act — the reform bill that President Obama signed in March — that will begin to address this problem,” Davis said. She added: “We need to find an approach that begins to move away from our fundamentally flawed system of paying doctors for each and every procedure that they do and instead pay them for taking care of patients […] so that one fee covers everything.”

Listen to the full conversation:

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