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Congress passes on chance to fix Medicare doctor pay

Congress may have rolled the country back from the so-called fiscal cliff, but the budget legislation passed this week missed a chance to fix doctors’ pay for treating Medicare patients -- a problem that’s been bugging doctors and patients alike for more than 10 years now.

Medical groups had hoped the House and Senate would use the fiscal cliff legislation as a chance to make the “doc fix” permanent. Instead, the bill provides a temporary patch, as it has done every year since 2003.

“Congress averted a drastic cut of 26.5 percent from hitting physicians who care for Medicare patients on January 1. This patch temporarily alleviates the problem, but Congress’ work is not complete; it has simply delayed this massive, unsustainable cut for one year,” American Medical Association president Dr. Jeremy Lazarus said in a statement. “Over the next months, it must act to eliminate this ongoing problem once and for all.”

Analysts agree.

“The bill sets Congress and the White House up to revisit these battles and a major deficit reduction effort in two months,” says Eric Zimmerman, a health care lawyer at McDermott Will & Emery, a Washington law firm. “Sometime between now and March 1, 2013, Congress and the White House will need to come to agreement on how to reapportion sequestration, fund the federal government for the balance of fiscal year 2013 and raise the debt ceiling, and Medicare and Medicaid spending will feature prominently in those debates.”

The American Academy of Family physicians estimates that the average family doctor would have suffered a $27,000 Medicare pay cut without the fix.

Some experts say the issue has helped scare doctors away from taking on Medicare patients. “This last-minute action on the part of Congress is a clear example of how the Medicare program is increasingly unreliable for physicians and patients,” Lazarus said.

AARP, which represents people over 50, makes the same argument. AARP executive vice president Nancy LeaMond praised Tuesday’s legislation but says it’s not enough. “Millions of seniors in Medicare will have the peace of mind in knowing that they will still have access to their doctors,” LeaMond says.

“However, for too long, the so-called ‘doc fix’ has been an annual game of chicken on Capitol Hill. And with another temporary patch in place, both the size of future cuts and the cost of fixing the flawed physician payment system continue to increase.”

The “doc fix” problem dates back to a 1997 law that was meant to cut costs. It gave doctors who treat Medicare patients modest raises for a while, but physicians started protesting loudly in 2002 when it provided for a pay cut. Instead of really fixing the formula, Congress just continually finds short-term solutions.

The Congressional Budget Office says it would cost $300 billion over 10 years to permanently preserve pay for Medicare doctors and Congress has never been able to agree on a good way to find the money. Easy sources of cash went elsewhere in the 2010 health reform law.

This year’s fix takes money mostly from hospitals to pay for it. It cuts Medicare payments to hospitals for taking care of patients overnight and as inpatients to the tune of about $10.5 billion over 10 years. It also reduces subsidies for so-called safety-net hospitals, some pharmacies and some dialysis facilities.

Hospitals are upset. “It is not in the best interest of patients or those who care for them to rob hospital Peter to pay for fiscal cliff Paul. These cuts could impact hospital services for those who need them the most,” says Chip Kahn, president and chief executive of the Federation of American Hospitals, which represents for-profit hospitals.

“While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities,” Rich Umbdenstock, president and chief executive of the American Hospital Association, said in a separate statement.

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