A Permanent Medicare Pay Fix For Doctors? Maybe Next Year

For years Congress has played a game of cat and mouse when it comes to figuring out how much Medicare should pay doctors.

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Congress isn't likely to fix a controversial formula for figuring out how much Medicare pays doctors anytime soon. iStockphoto.com hide caption

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Smoking a cigarette.

Congress isn't likely to fix a controversial formula for figuring out how much Medicare pays doctors anytime soon.


Under the Balanced Budget Act of 1997, Medicare has to trim how much it pays doctors when those costs to the program outpace inflation, which they have since 2003.

The automatic cuts are meant to control Medicare spending. But Congress, under pressure from doctors, has routinely overridden that mandate at the last minute to delay the scheduled pay cuts. But each year's postponed reduction gets piled onto the previous scheduled cuts, so the discount that's set to take effect March 1 now stands at 21 percent.

The American Medical Association and others have long pressed for a permanent solution to the pay formula. But it appears that the current will on Capitol Hill is to apply the usual temporary patch — especially now that health reform has stalled.

But, for at least a few moments, that wasn't the case. In November, the House approved a permanent Medicare physician payment fix as part of its health reform legislation. The Senate tried to advance the provision as a stand alone measure. It failed, and the upper chamber instead passed a two-month fix to push the reductions back to March 1 from the beginning of the year. That was supposed to give lawmakers more time to focus on the outcome of the sweeping reform bills.

Now, since those plans have been sidelined, the only means to avert the scheduled cut appears to be yet another short-term repair. This approach allows lawmakers to address physicians' immediate concerns, without having to dig too deeply into the budget.

The Hill reports that a bill passed last week by the Senate — the so-called "PayGo" legislation — that requires Congress to offset all new spending with cuts from other programs exempts the "doc fix" and allows Congress up to $82 billion more to spend for doctors' Medicare reimbursements. That's a pretty clear sign that lawmakers don't intend on permanently fixing the payment system this year. The CBO has estimated that a permanent fix could cost up to $210 billion over the next decade. But the American Medical Association is still pushing for a longer term solution, however unlikely.

American Medical News reports that the AMA is turning increasingly against the stopgap measures aimed at temporarily averting cuts: "We absolutely do not want a temporary fix," said Dr. Nancy Nielsen, immediate past president of the AMA.

Villegas is a reporter for Kaiser Health News, a nonprofit news service.



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