Senate moves to prevent Medicare cuts for another year

The Senate has voted unanimously to pass legislation that averts a 25 percent Medicare payment cut to physicians that was scheduled to take effect on Jan. 1, 2011.

This week in the Senate Committee on Finance, legislation was introduced to reverse the 25 percent Medicare payment cuts to physicians scheduled for Jan. 1, 2011, and to extend current payment rates through Dec. 31, 2011.

The Medicare and Medicaid Extenders Act of 2010 (H.R. 4994) was introduced by Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Finance Committee Co-Chairmen Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) to amend the Internal Revenue Code of 1986 to reduce taxpayer burdens and enhance taxpayer protections, and for other purposes.

According to a summary, the estimated cost of the Medicare extension provision is $14.9 billion over 10 years.

The legislation includes extension of ambulance add-ons that continue increased Medicare rates for ambulance services, including in rural areas, through the end of the new year and an extension of the Medicare work geographic adjustment floor.

“Under current law, the Medicare fee schedule is adjusted geographically for three factors to reflect differences in the cost of resources needed to produce physician services: physician work, practice expense, and medical malpractice insurance,” the summary stated. The provision would extend the existing 1.0 floor on the physician work index through Dec. 31, 2011.

The estimated costs for the floor adjustment and ambulance add-on provisions are $500 million and $100 million over 10 years, respectively.

H.R. 4994 and its summary can be accessed here.