Senate reaches deal, passes short-term "doc fix"

The Senate passed a bill Friday to block the 21 percent cuts to Medicare physician pay for six months, after failing Thursday to pass a larger bill extending tax and jobless benefits that also included the Medicare provision, The Hill reports. The measure will now need to be considered by the House, which has broken already for the weekend and which in May approved a pay fix that would last longer. Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, cut the deal Thursday night. It will replace the cuts with a 2.2 percent raise (Needham, 6/18).

"Senate Majority Leader [Harry] Reid and Senate Finance Chairman Max Baucus expressed relief that part of the legislative package moved forward before the weekend," CongressDaily reports. Baucus said, "Now doctors will be paid, and more importantly, seniors will get the benefits they deserve." Also, "[t]he $6.5 billion 'doc fix' price tag is fully offset with two revenue-raising provisions. One would ban hospitals from charging Medicare for outpatient and inpatient services rendered within 72 hours of a hospital admission, estimated to save $4.2 billion. The other would raise $2.8 billion by allowing companies to spread out their pension fund obligations over a longer period" (McCarthy, 6/18).

"But leaders still have yet to resolve larger problems with restoring jobless benefits and middle-class tax cuts that expired earlier this month," Roll Call reports. "It was unclear whether Democrats would decide to keep the longer delay of the pay cut in their tax extenders bill, considering eliminating it altogether would significantly reduce the cost of the overall bill. Both Democrats and Republicans have blocked the bill over the estimated cost to the federal deficit" (Pierce, 6/18).

Meanwhile, the agency that runs Medicare, the Centers for Medicare and Medicaid Services, began paying doctors 21 percent less Friday, MedPage Today reports. "The lower reimbursement rate technically went into effect on June 1, but CMS had announced that it would not process claims for medical services delivered after the deadline, giving Congress additional time to block the 21% cut. This most recent grace period -- CMS has issued four such reprieves this year -- expired on June 17" (Walker, 6/18).

For earlier coverage of the Senate's action Thursday, see KHN's Daily Report.