President Obama Approves One-Month Medicare Fix

December 1, 2010

President Obama Approves One-Month Medicare Fix

On Tuesday, November 30, 2010, President Obama signed into law H.R. 5712, the Physician Payment and Therapy Relief Act of 2010.  The bill provides a one-month, $1 billion fix to the Medicare physician payment formula preventing a scheduled 23 percent cut to Medicare payments that was to take effect on December 1, 2010.

The House approved the Senate’s plan to fund the fix through a 20 percent “multiple payment reduction” for physical therapy services.  The fix includes a 2.2 percent update in physician payments through the end of 2010.

Senate Finance Committee Chairman Max Baucus (D-MT) and ranking member Chuck Grassley (R-IA), who constructed the legislation, have vowed to develop a yearlong fix to the Sustainable Growth Rate formula to be enacted before the end of the calendar year.

A permanent fix will add billions of dollars to the federal budget deficits.  However, lawmakers, not wanting physicians to turn away elderly or disabled patients, have enacted a series of temporary fixes to the SGR to prevent significant cuts in Medicare Reimbursement.  In order to avoid a disruption in services for Medicare consumers, a lasting solution is required to ensure the stability of the program.