California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

President Obama Signs Measure on Payroll Tax Cut, Medicare ‘Doc Fix’

President Obama on Wednesday signed legislation (HR 3630) that extends the payroll tax cut, continues unemployment benefits and delays scheduled cuts to Medicare physician reimbursement rates, The Hill's "Blog Briefing Room" reports (Sink, "Blog Briefing Room," The Hill, 2/22).

The $143 billion package delays the Medicare rate cut, which would have been nearly 30%, until the end of 2012 (Pace, AP/Boston Globe, 2/21). When the "doc fix" expires, physicians will face about a 32% reduction in Medicare payments (Fiegl, American Medical News, 2/17).

Details of the Package

The legislation includes a 10-month "doc fix," which will allow Medicare to maintain current physician reimbursement rates, delaying a 27.4% reduction in fees set to start on March 1. To fund the $18 billion doc fix, the agreement includes several health-related offsets that would save $21.2 billion over a decade.

The measure will cut:

  • $5 billion from the prevention and public health fund created by the federal health reform law;
  • About $4.1 billion in Medicaid payments to hospitals with a disproportionate number of uninsured patients;
  • Payment rates for clinical laboratory services by 2% in 2013, to save an estimated $2.7 billion over a decade;
  • $6.9 billion in "bad debt" payments to hospitals when Medicare beneficiaries do not pay for services; and
  • $2.5 billion in Medicaid funding to Louisiana, which received increased funding from the overhaul (California Healthline, 2/17).
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