Scheduled Medicare Physician Payment Cut Frozen by HHS as Congress Leaves on Holiday Recess

The U.S. Dept. of Health and Human Services stepped in over the weekend and agreed to freeze temporarily the scheduled 10.6% cut to the Medicare physician payment scheduled for July 1, 2008, after Congress failed last week to pass any legislation to approve a permanent price fix.

Congressional aides said the HHS freeze to the current Medicare pricing system could last 10 days, until July 10th. When Congress reconvenes from the holiday break on July 7th, it will have three days to pass a bill to fix the Medicare physician payment fee before the HHS freeze is lifted.

Last week both the House and the Senate debated last minute proposed bills to eliminate the scheduled 10.6% cut to the Medicare physician payments scheduled for July 1, 2008.

In the House of Representatives, The House passed the “Medicare Improvements for Patients and Providers Act of 2008” (H.R. 6331). The bill received 355 “yes” votes and 59 “no” votes, more than the two-thirds (290 yes votes) required to pass the bill under the suspension of the House rules.

H.R. 6331 would:

• Halt the 10.6% cut to the Medicare physician payment scheduled for July 1;
• Maintain the current 0.5% payment increase through 2008; and
• Eliminate the additional 5% cut scheduled for Jan. 1, 2009, replacing it with a 1.1% increase for 2009.

The House bill (H.R. 6331) also includes a provision for the HHS Secretary to set accreditation standards for “advancing diagnostic imaging modalities,” which means facility accreditation standards for computed tomography (CT), magnetic resonance (MR) and nuclear medicine (including PET). The facility accreditation standards for these modalities must contain standards for technical personnel performing these procedures. Unfortunately, the House bill currently excludes standards for imaging procedures using ultrasound (including echocardiography), which SVU supported, and radiography (x-ray and fluoroscopy).

In the Senate, Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) last week reached a deal on a compromise Medicare package bill (S. 3101) that had several of the same provisions in the House bill. But it was expected that the bipartisan compromise bill in the Senate would prevail because of the strong partisan opposition in the Senate to the House bill.

However, last Thursday night (6/26), an attempt to close Senate debate on a motion to consider the Senate Medicare bill failed by one vote, which forced Senate Majority Leader Harry Red (D-NC) to adjourn the Senate for the July 4th holiday recess without any action on a Medicare bill. This meant the scheduled 10.6% cut in the Medicare physician payment would have gone into effect on July 1, until the HHS Secretary decided to freeze the cut for 10 days to give the Senate time to act when it got back in session.

According to Sidley Austin, SVU’s legislative and regulatory advocacy firm in Washington, DC, it is not clear how the Senate will proceed with the Senate Medicare package bill when it returns to business the week of July 7. There is considerable Republican unhappiness over the Democratic leadership’s decision to forgo the Baucus-Grassley Senate compromise and press for a vote on the Democrat-backed House measure. Tempers are hot in Congress on this issue as the House and the Senate try to find a solution to the Medicare physician payment cut.