Medicare cut halted for 6 months; reprieve causes 'great uncertainty'

Key Points

In a last-ditch maneuver in the federal House and Senate just before legislators departed the city for their winter holiday break, both houses averted the cut and approved a 0.5% increase for physicians through June 30.

If Congress fails to act before that date, however, physicians will see a 10.6% cut in the fees paid by Medicare, because of the way the financing is structured, ASCRS officials said in its statement.

The measure passed by Congress also extends the Physician Quality Reporting Initiative, that which gives ophthalmologists an extra 1.5% of the total allowed charges for covered Medicare physician fee schedule services for reporting if they report on four measures approved by the National Quality Forum. The American Medical Association, ASCRS, American Academy of Ophthalmology, and other medical groups have told legislators that they would rather see that money funneled into fixing the fee-payment issue.

The groups were hoping change was on the way after the House passed, 225-204, its Children's Health and Medicare Protection (CHAMP) Act on Aug. 1.

That legislation would have provided a fully funded positive update for 2 years and would have repealed the sustainable growth rate formula that has been at the center of the payment debate. Despite that momentum, advocates in the Senate were not able to get the 60 votes needed to overcome objections to a longer-term solution, ASCRS reported.

What could have been

The CHAMP Act would have allocated $20 billion over 5 years and $67 billion over 10 years to replace 15% cuts in Medicare payment rates for all physician services over the next 2 years with positive updates of 0.5%.

The bill would have invested new money to improve payments in 2008 and 2009 and defray a portion of the cost by moving up some pay cuts that would have occurred in the longer term. Instead of physicians being hit with 9 years of 40% cuts, they would have faced about 3 years of 25% cuts.

The act would have funded the program by raising taxes on cigarettes and reducing payments to private Medicare Advantage plans.

Now, advocates are hoping that senators will find some success with a larger Medicare bill to be discussed under "budget reconciliation" rules, meaning that only 51 votes would be required for passage. Senate Finance Committee Chairman Max Baucus (D-MT) and Finance Committee ranking member Charles Grassley (R-IA) have pledged to work toward at least a 2-year "fix" in 2008, ASCRS reported.

However disappointing it was for those working for a long-term change, Indianapolis retina specialist Ramana S. Moorthy, MD, said he is relieved that the cuts were stopped for now.

"As Medicare physician providers, we are all grateful for the 11th-hour reprieve from Congress to postpone and re-evaluate the proposed 10.1% cuts," said Dr. Moorthy, who serves on his state's Medicare carrier advisory committee. "We hope this can eventually lead to a meaningful dialogue for a solution to the medical-care crisis, implementation of a fair reimbursement system to physicians, and [the provision of] needed medical care to all our citizens."