Medicare physician pay cuts now slated for March

Obama signs legislation but debate continues

Topics: Medicare, Reimbursement, Finance, Physician Issues, Recession/Downturn, Market Trends, Strategy

January 4, 2012

President Obama on Dec. 23 signed a two-month extension of the payroll tax cut that delays scheduled Medicare reimbursement cuts for physicians until March.

The measure came together after House Republicans reversed on a decision earlier in the week and agreed to accept a short-term measure. The House and Senate unanimously approved the measure (HR 3765) during legislative sessions earlier that day.

Under the deal, Medicare will continue reimbursing physicians at current rates, averting a 27.4% payment cut that would have been effective on Jan. 1. Republicans secured several minor concessions from Senate leaders, including an agreement from Senate Majority Leader Harry Reid (D-Nev.) to appoint members to a conference committee to negotiate after Jan. 1 on how to fund a full-year tax cut.

Payroll tax cut discussions to resume after recess
Although lawmakers prevented the cuts in the short term, a House-Senate conference committee still will need to reach a long-term agreement on the issue, CQ Today reports.

Lawmakers will need to find at least $150 billion to offset extensions to the payroll tax break, jobless benefits, and the doc fix through the end of 2012. Republicans have opposed tax increases to offset the costs, while Democrats said they will not allow additional cuts to discretionary spending or a one-year extension of a pay freeze for federal workers (Lesniewski, CQ Today, 12/23/11 [subscription required]; Steinhauer, New York Times, 12/22/11; Goldfarb/Schatz, CQ Today, 12/27/11 [subscription required]).

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