HOUSE AND SENATE HALT 5% PHYSICIAN PAYMENT CUT

Saturday, December 9, 2006

Over the course of two days the House and Senate approved the “Tax Relief and Health Care Act of 2006” (H.R. 6111). The House approved the measure on December 8 by a vote of 367-45-21]. The Senate approved the bill in the early morning hours of Saturday, December 9 by a vote of 79-9-12. The bill will now be sent to President Bush for his signature and enactment into law.

H.R. 6111 is a large legislative package that included provisions related to Medicare, health insurance, the tax code, energy, and trade policies. The bill includes many provisions of importance to the American Osteopathic Association (AOA) and osteopathic physicians, including a provision to avert the 5 percent cut in Medicare physician payments scheduled to take effect on January 1, 2007. A summary of these provisions follows:

  • Prevents the implementation of the scheduled 5 percent reduction in Medicare physician payments. Medicare physician payments for 2007 will be frozen at 2006 levels. This provision is applicable to all physicians participating in the Medicare program and all physician services.
  • Extends the floor on the work component of the physician geographic practice costs indices (GPCI) through December 31, 2007. The provision, originally established as part of the Medicare Modernization Act (MMA), requires the Secretary of HHS to increase the value of any work geographic index that is below 1.00 to 1.00 for physician services.
  • Establishes a bonus payment of 1.5 percent, beginning in July 2007, for physicians who report quality data voluntarily through the Centers for Medicare and Medicaid Services (CMS) Physician Voluntary Reporting Program (PVRP).
  • Requires the Secretary of Health and Human Services to establish a “medical home” demonstration project.
  • Requires CMS to reimburse physicians for administering vaccines that are covered under Medicare Part D. Physicians will be reimbursed for their services through Medicare Part B in 2007 and Medicare Part D in 2008 and beyond.

    Other health related provisions included in H.R. 6111:
  • Provides a one-year extension of the exceptions process established under the Deficit Reduction Act to allow patients to apply for additional therapy services if there treatments exceed the annual allowable limit on therapy services.
  • Reduces the limit on Medicaid provider taxes from 6 percent to 5.5 percent for years 2008-2011.
  • Requires an OIG study and report on the prevalence of, and payment for, “never events” in the Medicare program. Never events are defined as medical services that the medical community feel should never occur and result in death or serious disability of the patient.