President Signs Bill Averting Physician Fee Cuts

President Obama signed legislation (HR 3630), Feb.22, that extends the payroll tax cut, continues unemployment benefits and delays scheduled cuts to Medicare physician reimbursement rates for ten more months.

The $143 billion package contains a "Doc Fix" that will delay the Medicare rate decreases through the end of 2012 when physicians will than face about a 32% reduction in Medicare payments.  

To fund the $18 billion needed to avert physician fee cuts, the agreement includes several health-related offsets that would save $21.2 billion over a decade. Cuts include:

• $5 billion from the prevention and public health fund created by the federal health reform law;
• About $4.1 billion in Medicaid payments to hospitals with a disproportionate number of uninsured patients;
• Payment rates for clinical laboratory services by 2% in 2013, to save an estimated $2.7 billion over a decade;
• $6.9 billion in "bad debt" payments to hospitals when Medicare beneficiaries do not pay for services; and
• $2.5 billion in Medicaid funding to Louisiana, which received increased funding from the overhaul