Standoff Sets in as House Rejects Bill that Would Extend 2011 Medicare Rates

The 27 percent cut to Medicare physician reimbursement rates, as well as tax increases and a lapse in jobless benefits, are due to take effect January 1st. They are looming even though Democrats and Republicans agree that they shouldn’t happen. Instead of stopping them, the factions have once again painted themselves into a corner.

Tuesday, the House rejected by a 229-193 vote, a bill passed by the Senate that would have extended Medicare physician reimbursement rates and payroll tax cuts for two months while Congress tried to fashion a longer-term fix. The GOP-controlled House, upending a deal that appeared set just days earlier, also demanded that Senate leaders return to Washington and negotiate a longer extension of the Medicare physician reimbursement rates and payroll tax cut, as well as expiring benefits for the long-term unemployed.Whatever the stakes, there was little indication that House Republicans would get their wish for negotiations with the Senate any time soon. The Senate adjourned this past Saturday until January 23rd, except for pro forma sessions which require all 100 senators agree.

If legislation isn’t passed by New Year’s Day, the big cuts in Medicare payments will become law. Medicare announced Tuesday that, as it has in the past when doctors’ reimbursements have been cut through congressional inaction, it would withhold physicians’ payments for two weeks in January to avoid passing on a 27 percent cut in Medicare fees. The hope is that the problem gets fixed by then. If Congress passes a fix, Medicare would pay the claims at the higher 2011 rates. If no deal is reached, Medicare would begin paying the claims at the reduced rates.

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Kirk Reinitz, CPA
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