Congress Passes “Doc Fix,” a One-Year Extension of Medicare Reimbursement Rates

After several weeks of negotiations, Senate leadership agreed on bipartisan, fully-paid legislation that would protect physicians from the 25 percent Medicare pay cut scheduled to go into effect on January 1, 2011. This extension instead keeps payments at current levels for a one-year period.

On the evening of Wednesday, December 8, the Senate approved by unanimous consent the "Medicare and Medicaid Extenders Act of 2010." The House approved the bill on Thursday, December 9 by a 409-2 vote and it was sent to the President for his signature.

While both sides of the aisle agreed that the cuts needed to be stopped, compromises were necessary on the potential offsets, which amounted to 20 billion dollars. The offsets mainly include a modification of the health exchange subsidy provision from the Patient Protection and Affordable Care Act (PPACA). The modified provision would increase the amount of money that the government may recapture from individuals who are over-subsidized to buy health insurance in the health exchanges and dramatically increase the maximum amount for high earners. The bill also uses 275 million dollars from the Medicare Improvement Fund to help cover the cost of the legislation.

The legislation includes additional Medicare "extenders," such as the Transitional Medical Assistance Program, Medicare therapy cap exceptions, the Qualifying Individual Program and the Special Diabetes Program.

If you have any questions, please e-mail Isabelle Le Blanc, Manager, Health Policy.