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Updated: Congress Passes 2011 Medicare 'Doc Fix,' Repeals Delay of RUG-IV

December 9, 2010
by root
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*This article was updated on December 10 to reflect changes to RUG-IV implementation.

Congress approved a bill Thursday morning that would prevent the 25% cut in physician Medicare reimbursement rates through 2011, as well as repeal the delay of RUG-IV, which fully implements the new Medicare payment system originally scheduled to become effective this past October. In addition, the bill extends Medicare’s Part B therapy caps exception process until 2012. President Obama is expected to sign off on the legislation.

“Our profession now has the tools to ensure that in 2011 we can continue delivering the comprehensive, complex, and medically necessary health services America’s seniors need and deserve,” the American Health Care Association and Alliance for Quality Nursing Home Care said in a statement.

While physicians and nursing homes had reason to rejoice, the bill weighed in with a hefty price tag. “In addition to freezing physician compensation at current Medicare levels, the legislation extends expiring Medicare payment policies and funds minor changes to Medicare, Medicaid, and the Children's Health Insurance Program,” Medscape Today reported. “All told, the cost of the legislation tops $19 billion, with nearly $15 billion devoted to the doc fix.”

The bill pays for itself by changing a provision of the health reform law that provides tax credits for people who buy coverage. Because the credit is scaled to personal income, this ‘doc fix’ bill will increase the amount of money people would have to repay for that credit if they underestimate their earnings.

With the year-long freeze all but passed, lawmakers say they will be working toward a permanent solution to this reimbursement issue that appeases both physicians and Congress.

“I look forward to working with the new Congress on a permanent solution to fix Medicare’s physician payment system once and for all,” said Kathleen Sebelius, secretary of the Department of Health and Human Services, in a release.

“[Lawmakers] may turn to the recent recommendations of a bipartisan commission created by President Obama to reduce the federal budget deficit,” Medscape Today reported. “A report drafted by the commission's cochairmen, Alan Simpson and Erskine Bowles, proposed freezing Medicare rates through 2013, reducing them by 1% in 2014, and then instituting a new pay formula in 2015 that rewards providers for the quality—not quantity—of their services.”

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