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Congress Finally Agrees To Give Doctors a Pay Raise

congressMedicare’s troubled physician payment formula will soon be history.

As expected, the Senate Tuesday night easily passed legislation to scrap the formula, accepting a bipartisan plan muscled through the House last month by Speaker John Boehner and Democratic leader Nancy Pelosi. The Senate vote came just hours before doctors faced a 21 percent Medicare pay cut.

Under the bill, the current reimbursement schedule would be replaced with payment increases for doctors for the next five years as Medicare transitions to a new system focused “on quality, value and accountability.” Existing payment incentive programs would be combined into a new “Merit-Based Incentive Payment System” while other alternative payment models would also be created.

“Passage of this historic legislation finally brings an end to an era of uncertainty for Medicare beneficiaries and their physicians — facilitating the implementation of innovative care models that will improve care quality and lower costs,” said Dr. James L. Madara, chief executive officer of the American Medical Association. “Patients will be able to get the care they need and deserve.”

The Senate voted 92 to 8 to approve the legislation, which the House passed 392-37.

It now moves to President Barack Obama, who — shortly after the Senate vote — said he would sign the bill, calling it “a milestone for physicians, and for the seniors and people with disabilities who rely on Medicare for their health care needs.”

There’s enough in the wide-ranging measure for both sides to love or hate. “Like any large bill it’s a mixed bag in some respects, but I think on the whole it’s a bill well worth supporting,” Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday.

The bill includes two years of funding for an unrelated program, the Children’s Health Insurance Program, or CHIP. GOP conservatives and Democrats are unhappy that the package isn’t fully paid for, with policy changes governing Medicare beneficiaries and providers paying for only about $70 billion of the approximately $210 billion package. The Congressional Budget Office has said the bill would add $141 billion to the federal deficit.

Consumer and aging organizations also have expressed concerns that beneficiaries will face greater out-of-pocket expenses on top of higher Part B premiums to help finance the way Medicare pays physicians.

But lawmakers said they had struck a good balance in their quest to get rid of the old system. “I think tonight is a milestone for the Medicare program, a lifeline for millions of older people,” said Sen. Ron Wyden, D-Ore. “That’s because tonight the Senate is voting to retire the outdated, inefficiency rewarding, common sense-defying Medicare reimbursement system.”

For doctors, the passage is an end to a familiar but frustrating rite. Lawmakers have invariably deferred the cuts prescribed by a 1997 reimbursement formula, which everyone agreed was broken beyond repair. But the deferrals have always been temporary because Congress has not agreed to offsetting cuts to pay for a permanent fix. In 2010, Congress delayed scheduled cuts five times.

More information: Is Congress Ready to Fix Medicare Pay for Doctors?

By Mary Agnes Carey, Kaiser Health News

Kaiser Health News (KHN) is a nonprofit national health policy news service.

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