Senate Leaders Roll Out Bill To Avoid Medicare Pay Cut for One Year

On Tuesday, a bipartisan group of Senate leaders officially introduced legislation that would delay for one year scheduled cuts to physicians' Medicare payments, blocking a 25% payment cut that is scheduled to take effect on Jan. 1, 2011, Politico reports (Haberkorn, Politico, 12/7).

Congress last month approved a bill (HR 5712) that delayed for one month a 23% cut to Medicare physician payment rates scheduled to take effect on Dec. 1. The bill included a 2.2% payment increase to physicians that would be funded through payment reductions for therapy services (California Healthline, 12/7).

Legislation Details

The new measure -- which the Congressional Budget Office estimated will cost $14.9 billion over 10 years -- would extend current reimbursement rates until 2012 for physicians who serve Medicare patients.

CBO said the full package -- which includes extensions to several other expiring Medicare programs at an estimated cost of $4.6 billion -- is fully funded.

The bulk of the bill's cost would be offset through changes to a provision in the federal health reform law related to health coverage subsidy overpayments. The measure also would rely on $275 million in revenue from the Medicare Improvement Fund, according to CQ Today.

Senate leaders plan to bring the legislation for a vote on the floor on Wednesday. The measure is expected to be approved by unanimous consent (Ethridge, CQ Today, 12/7).

Funding Mechanism

Under the overhaul, low- to middle-income individuals and families in 2014 will be eligible for tax subsidies to cover their health coverage costs through the new health insurance exchanges.

The law stipulates that U.S. residents who receive a larger tax subsidy than they are eligible for must repay the federal government a portion of the subsidy -- up to $250 for individuals and $400 for families (Politico, 12/7).

CQ Today reports that the "doc fix" bill would change the repayments to a sliding scale structure based on the income levels of the recipients. According to a Senate aide familiar with the revised repayment plan, recipients with incomes:

• Between 100% and 200% of the federal poverty level would be required to repay up to $300 for an individual and $600 for families;
• Between 350% and 400% of the poverty level would be required to repay up to $1,250 for an individual and $2,500 for families;
• Between 400% and 450% of the poverty level would be required to repay up to $1,500 for an individual and $3,000 for families;
• Between 450% and 500% of the poverty level would be required to repay up to $1,750 for an individual and $3,500 for families; and
• Over 500% of the poverty level would be required to repay the full subsidy.

According to CQ Today, if the measure is approved, it would mark the first major adjustment to the health reform law since it was enacted in March (CQ Today, 12/7).