House Passes 2-Year Doc Fix and “Medicare Extenders” Package

The House on December 12 passed legislation by a vote of 234-193 that includes a 2-year “fix” to the Medicare sustainable growth rate for physician reimbursement.  The bill would prevent the scheduled 27.4 cut in Medicare physician payments and instead increase the payment rates by 1 percent in 2012 and an additional 1 percent in 2013.  The legislation also would extend the therapy caps exceptions process through December 31, 2013 with some modifications to the current process.  The legislation would require that the physician reviewing the therapy plan of care be detailed on the claim.  Claims above the spending cap that do not include the proper billing modifier would be rejected.  A manual review would be required for all claims for high cost beneficiaries.  The spending cap for 2012 would be $1880 and this cap would be extended to the hospital outpatient department setting.  The Congressional Budget Office estimated the therapy caps provision of the legislation would reduce spending by $1.7 billion over 10 years.

The legislation relaxes current restrictions on physician-owned hospitals by allowing those facilities that were under construction but did not have a Medicare provider number as of December 31, 2010 to open and operate under the whole hospital exception to the Stark antitrust laws.  The bill includes a reduction of $6.8 billion for hospital outpatient payments for evaluation and management and a reduction in Medicare “bad debt” payments that the CBO estimated would reduce spending by $10.6 billion over 10 years.  The legislation also would increase Medicare premiums by 15 percent for high-income beneficiaries.  Senate Majority Leader Harry Reid (D-NV) said the bill would not pass the Senate.  Reid said, “The bill passed by House Republicans tonight is a pointless, partisan exercise. The Senate will not pass it and the president has said he will veto it.”

The American Hospital Association (AHA) and eight other hospital groups sent a letter to Congress stating their strong opposition to using reductions in Medicare payments to hospitals and Medicaid funding to offset the scheduled physician payment cut.  AHA is urging its members to oppose the cuts.  The letter to Congress is available here.