Medicare pay cut delayed until Nov. 30

Washington, DC-After enduring a weeklong 21.2% pay cut, ophthalmologists and other physicians who see Medicare patients will receive a 2.2% pay increase, retroactive to June 1 through Nov. 30.

In a hastily arranged vote June 24 with just one Democratic representative in opposition, the House approved a 6-month plan reversing the cut. President Obama signed the "Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010" into law June 25.

The $6.4 billion plan was approved by the Senate in a unanimous voice vote June 18, but the House delayed action, hoping it could force the Senate to address a broader "tax-extenders" bill that would have prolonged certain unemployment benefits and tax provisions.

"What we had hoped to do was send it back to them with unemployment insurance and the rest, but it is clear that at this time, they can't pass that," Pelosi said, according to The New York Times.

The "doc fix" has taken many twists and turns since Jan. 1, when the 21.2% pay cut was to have taken effect. In late May, the House passed a bill freezing pay cuts until December 2011, so it seemed the Senate version approved June 18 might pass quickly in the House when representatives returned from a weekend break.

Over that weekend, however, Pelosi said she wanted the Senate to act on the broader measure before the House would consider this stand-alone bill. While the issue was locked in a stalemate, physicians were hit with their biggest pay cut in history.

At issue in the Senate was how Congress would pay for the increase to physicians, who have expressed "extreme outrage and frustration" over the instability presented by the threat of a pay cut, said Cathy G. Cohen, the American Academy of Ophthalmology's vice president for governmental affairs.

House Republicans and conservative Democrats have opposed anything that would add to the federal deficit. Senate Finance Committee Chairman Max Baucus (D-MT) and Senate Finance Committee Ranking Member Charles Grassley (R-IA) agreed instead to offset the increase by changing a 3-day in-patient rule and certain pension provisions, Cohen said.

These so-called "pay-fors"-named because they are savings used to "pay for" increases elsewhere-originally were to be used to cover costs incurred by the tax extensions. The tax-extenders bill remains under debate in the Senate.

To fund the pay increase, the Senate will limit how much some companies have to set aside to pension funds, forcing companies to pay more than $2 billion in taxes on the unencumbered money. The in-patient rule change will save the government more than $4 billion by limiting when Medicare can adjust claims made by hospitals for in-patients.