Agreement Reached to Prevent Medicare Doctor Payment Cuts

Lawmakers have reached an agreement that will prevent a pending 27.4 percent cut to Medicare physician payments, which would otherwise take effect on March 1. As part of the agreement, current Medicare physician payment rates will remain intact through the end of 2012. At that time, Congress will need to take further action to prevent Medicare physician reimbursement rate reductions from taking effect on January 1, 2013. In order to offset the cost of the cut through the end of this year, Congress enacted reforms that reduce the amount of “bad debt” payments Medicare makes to help hospitals and doctors cover unpaid bills from patients. The final agreement also cuts the Prevention Fund, an important component of the Affordable Care Act (ACA) that provides increased funding to make investments in preventive care.

In addition, the final agreement includes extensions of several important Medicare programs, including the Qualified Individual (QI) benefit and the Medicare therapy caps exceptions process. QI is a federal block grant that is provided to states to help individuals with limited incomes pay their monthly Medicare Part B premiums. The Medicare therapy caps exceptions process allows individuals to receive speech, physical and occupational therapy beyond standard Medicare limits, when such services are medically necessary. However, the agreement includes slight modifications to the existing exceptions process that will require more stringent reviews of exceptions requests.

According to reports, a vote on the agreement can take place as early as Friday. The bill also contains provisions that would extend both a temporary Social Security payroll tax cut and unemployment insurance benefits due to expire at the end of the month.