WASHINGTON – President Obama Tuesday signed into law legislation to give doctors temporary relief from a flawed Medicare payment formula that threatened them with a 24 percent cut in their fees.
A 64-35 Senate vote Monday cleared the measure through Congress.
The $21 billion bill would stave off a 24 percent cut in Medicare reimbursements to doctors for a year and extend dozens of other expiring health care provisions, such as higher payment rates for rural hospitals. The legislation is paid for by cuts to health care providers, but fully half of the cuts won't kick in for 10 years.
It's the seventeenth temporary "patch" to a broken payment formula that dates to 1997 and comes after lawmakers failed to reach a deal on financing a permanent fix.
The measure passed the House last week.
There's widespread agreement on bipartisan legislation to redesign the payment formula that would give doctors 0.5 percent annual fee increases and implement changes aimed at giving doctors incentives to provide less costly care. But there's no agreement on how to pay the approximately $140 billion cost of scrapping the old formula.
"We just don't have the votes right now to fix this problem for good," said Senate Majority Leader Harry Reid, D-Nev., who negotiated the measure with House Speaker John Boehner, R-Ohio. "For the millions of elderly Americans and their doctors this fix is good news. It means the promise of accessible, quality health care to our nation's seniors is being honored for another year."
The heavily lobbied measure blends $16 billion to address Medicare physicians' payments with about $5 billion more for a variety of other expiring health care provisions, such as higher Medicare payments to rural hospitals and for ambulance rides in rural areas. Manufacturers of certain drugs to treat kidney disease catch a break, as do dialysis providers and the state of California, which receives increases in Medicare physician fees in 14 counties such as San Diego and Sacramento that are designated as rural and whose doctors therefore receive lower payments than their urban counterparts.
The bill increases spending by $17 billion over the next three years, offsetting the cost with cuts to health care providers. The authors of the bill employed considerable gimmickry to amass the cuts, however, and fully half of them don't appear for 10 years. For instance, the bill claims $5 billion in savings through a timing shift in Medicare cuts in 2024.
"We are going to put off until tomorrow what we should be doing today," said Sen. Tom Coburn, R-Okla., a critic of the bill. "It's a sham. ... It's nothing but gimmicks."
The bill also creates two new mental health grant programs, including $1.1 billion over four years for improvements to community health centers in eight states and $60 million over four years for outpatient treatment for people with serious mental illness.
The measure solves the fee schedule problem through next March.
Because of a flawed formula dating to 1997, Medicare doctors are threatened with big fee cuts almost every year. After allowing a 4.8 percent Medicare fee cut to take effect in 2002, Congress has since stepped in 16 times to prevent the cuts.