The Senate voted on Wednesday to delay a 21 percent Medicare physician pay cut until Oct. 1.
If the House joins the Senate in passing the measure, this will be the third time Congress has postponed the cut that was mandated to take place Jan. 1, 2010.
J. James Rohack, MD, president of the American Medical Association said the Senate's action delays solving the problem.
"Short-term actions are the wrong answer to a long-term problem," Rohack said. "These band-aid fixes have only served to increase the size of the cuts and the cost of reform. The longer Congress delays, the higher the cost to the American taxpayer. It's time to fix the formula and ensure that seniors can count on Medicare now and for years to come."
The Centers for Medicare and Medicaid Services (CMS) is mandated to adjust the Medicare physician fee schedule annually, based on a formula using the sustainable growth rate (SGR) adopted in the Balanced Budget Act of 1997.
Using the formula, CMS has issued negative updates every year beginning in 2002. Congress has intervened over the past several years to postpone a pay cut.
Congress has struggled since 2009 over where to include permanent fix for the Medicare physician payment formula. Some lawmakers would have a stand-alone bill, while others would include it in a major healthcare reform package.
Most members of Congress agree that Medicare payments to physicians are too low, but the issue of how to pay for the increases is tangled up in the overall debate of how to reform the American healthcare system, now stalled in Congress.
At a Feb. 25 White House summit on health reform, Sen. Kent Conrad (D-N.D.) said, "the biggest unfunded liability in the U.S. is Medicare."
"Medicare is going to go broke in eight years," he said. "The idea that we don't have to do anything about Medicare is utterly disconnected from reality."
Last November, the House passed the Medicare Physician Payment Reform Act by a vote of 243 to 183 that would permanently repeal the 21 percent cut for 2010 and would overhaul the current physician payment formula.
The Senate voted 47-53 last October against a bill introduced by Sen. Debbie Stabenow (D-Mich.) that would have frozen physician payments where they currently stand. The bill would have cost a quarter of a billion dollars over 10 years.
Bob Doherty, senior vice president of government affairs and public policy for the American College of Physicians (ACP) said at a recent briefing that he does not know what kind of vehicle Congress will use to correct the physician payment formula, "but a long-term change must be enacted."
"I would never assume something will get done, until something gets done," he said. "The problem is, because of the failure of past Congresses to deal with the SGR in a straight way, what they have done is dug a hole so deep they don't know how to get out of this or where to find the money."