Senate Finance panel developing 18-month Medicare pay package

At the same time, MedPAC calls for physicians to receive a 1.1% raise next year.

By David Glendinning, AMNews staff. Feb. 4, 2008.

Washington -- Even with Medicare payments to physicians still in doubt for the final half of this year, lawmakers and their Medicare advisers already are thinking about how much doctors will be paid next year.

If Democrats on the Senate Finance Committee have their way, by early summer physicians will know what they'll be paid both in the last half of 2008 and in 2009.

A six-month 0.5% boost is set to run out at the end of June and be replaced with a 10.1% reduction. This means that Medicare would cut pay across the board by 10.6% from current levels from July 1 through the end of the year.

In anticipation of this, Finance Committee members are working on 18-month payment legislation, rather than just another six-month patch, a Democratic aide on the panel said at a Washington, D.C., forum in January.

An 18-month measure would put off the next round of scheduled cuts until 2010 and free Congress from negotiating a 2009 payment update in the height of the presidential election season. The Finance Committee aide did not say how much doctors would get under the plan but said it would be part of a Medicare reform package that would cost between $12 billion and $15 billion over five years.

Congress could simply extend the 0.5% increase through the second half of 2008 without paying for the entire raise. But that action would trigger a 10.6% pay reduction come 2009 under the payment formula. On top of that, the already projected 5% cut for next year would then go into effect.