By John Reichard, CQ HealthBeat Editor
October 6, 2010 -- Doctor groups are warning congressional leaders that a series of short-term measures lawmakers passed earlier this year to block Medicare payment cuts were too disruptive to medical practices. To keep doctors from bailing out of the program, Congress should pass a longer-term fix that lasts through 2011, they say.
It won't be easy for Congress to kick its habit of short-term fixes, however. Billions of dollars in offsets elsewhere in the federal budget will be needed to cover the costs of future payment patches. And the cost climbs astronomically the longer the fix.
The talk among committees on the Hill is that Congress will pass a 31-day fix before Thanksgiving and a subsequent one of six months to 13 months when lawmakers wind up the lame duck session in December, says Julius Hobson, senior policy adviser with Polsinelli Shughart's Washington law office.
Lawmakers are scheduled to return to Capitol Hill the week of Nov. 15 for just one week and return after Thanksgiving.
The current payment patch expires Nov. 30. If Congress doesn't act, Medicare payments to doctors are scheduled to be cut by 23 percent on Dec. 1, and by another 6.5 percent on Jan. 1.
In theory, that means Congress has to act before its Thanksgiving break to head off the first cut, although lawmakers have missed such deadlines before and Medicare has used its administrative authority to delay the cuts for a brief periods.
Tired of Short Fixes
But in a Sept. 29 letter to House leaders, the American Medical Association (AMA) and 65 other national medical organizations said they're tired of that drill.
When Congress failed to enact fixes on time earlier this year, the Medicare program "reacted by ordering carriers to hold payments until legislation was passed," the letter says.
These "payment uncertainties and delays were highly disruptive,'' the groups said. "Many practices were forced to seek loans to meet payroll expenses, lay off staff, or cancel capital improvements and investments in electronic health records and other technology. Furthermore, when payments resumed, many physicians experienced long delays in receiving retroactive reimbursements. This is not the way to manage a program that seniors and the disabled rely on."
The letter noted that the next cut is scheduled to occur "during the period when physicians may change their status from a Medicare participating physician, who accepts Medicare's allowance as payment in full, to a non-participating physician who may bill patients more than the Medicare allowance.
"We can anticipate that many physicians will be examining whether it makes any sense to continue their current relationship with Medicare given the severe disruptions of the past year," the letter said.
AMA and other groups have not given up on their insistence that Congress permanently overhaul the formula, which lines up doctors for cuts for a number of years to come. But a fix through 2011 "will provide time for Congress and the physician community to develop a long term solution," the groups said.
The extension of the current fix would require budgetary offsets of between $1.4 billion and $1.6 billion a month, Hobson said. In this year's congressional campaigns, Republicans have blamed the federal deficit on Democrats, creating a legislative environment in which the GOP faces much pressure to pay for any "doc fix" legislation. "Republicans insist on offsets," Hobson said, but given the cost of this year's health overhaul, there may not be enough offsets left that both parties can agree on.
Hobson also said that Senate Finance Committee Chairman Max Baucus, D-Mont., has talked about passing a 13-month fix once the current patch is extended through the end of the year. But, Hobson added, "I also know that Republicans don't want to go that far and have talked about six months" as the length of a fix.
A Finance Committee aide said "Chairman Baucus supports a permanent physician payment fix and will work toward passing the longest fix possible in a 60-vote environment."
Democrats and independents have 59 votes in the Senate. But after the November elections, that majority could drop to as low as 56 or 57 because the new senators from Delaware, West Virginia and Illinois will be seated during the lame-duck session. That would make it more difficult for Democrats to enact their desired payment fix.
All of that could mean that part two of the fix in the lame duck probably won't last long either, he says. "We're probably somewhere in the two-to-six month category," Hobson said.