Congress OKs temporary reprieve on Medicare pay cut, renews SCHIP

A 0.5% Medicare payment increase will prevent a scheduled 10.1% reduction until July 1, while SCHIP is extended through March 2009.

By David Glendinning and Doug Trapp, AMNews staff. Jan. 7, 2008.

Washington -- In the closing days of the 2007 session, Congress prevented a Medicare payment cut and kept the State Children's Health Insurance Program alive, but both moves are only temporary.

By unanimous consent on Dec. 18, 2007, the Senate passed the Medicare, Medicaid and SCHIP Extension Act of 2007. The House passed the same legislation 411-3 the next day, and a White House official indicated President Bush would sign the measure.

Instead of facing a 10.1% across-the-board cut in Medicare reimbursement beginning Jan. 1, physicians were given a 0.5% increase. But the boost expires June 30, meaning that the reduction will go into effect in July unless lawmakers approve another bill that would continue to stave it off. Without such a move, the Medicare payment formula would act as if the boost had never happened, and rates as of July 1 would be 10.1% lower than in 2007. The bill also extends payment provisions for rural physicians.

In light of the action, the Centers for Medicare & Medicaid Services extended the deadline for changing Medicare participation status to Feb. 15.

While physician organizations said the half-percent increase is better than a double-digit percentage cut, they are still disappointed that Congress was unable to enact a longer-term Medicare solution. The AMA and other groups were pushing for two years of increases that would reflect the rise in the annual cost of providing medical care.

AMA Board of Trustees Chair Edward L. Langston, MD, said it was extremely disappointing that months of work in the House this year produced only a six-month reprieve. The short-term nature of the bill "creates uncertainty for both Medicare patients and physicians."