Congress halts pay cut, saves drug discount

Print Friendly and PDF By: Andy Miller Published: Dec 9, 2010

In terms of health care fixes, it was a two-for-one deal on Capitol Hill.

The House of Representatives, by an overwhelming vote Thursday, approved a 12-month delay in the impending 25 percent pay cut for doctors treating Medicare patients. The Senate had already approved an identical bill, and President Obama has indicated he will sign the measure into law.

Besides its main provision, the “doc pay fix” bill also contains language that restores a discount to children’s hospitals for drugs that treat rare medical conditions.

Because of an oversight by lawmakers who drafted it, the health care reform law passed earlier this year removed the price break for those so-called “orphan drugs,” and that change could have cost children’s hospitals hundreds of millions of dollars nationally. The expected economic hit to Children’s Healthcare of Atlanta was estimated to be $500,000 to $600,000 a year.

The doctor pay cut stems from a 1997 budget-balancing law that requires physicians’ reimbursement rates from Medicare to be adjusted every year, in order to keep the program fiscally sound. But several times in recent years, when the scheduled pay reductions for doctors loomed, Congress stepped in to block them, just as it did this year.

Physician groups and AARP are pushing for a permanent solution to the pay problem, though that won’t be cheap. To eliminate the doctor pay formula would cost an estimated $250 billion to $300 billion over a decade.

According to a  PBS NewsHour report, experts feared that if the pay cut had gone through this time, it could have set off a crisis, driving many doctors to stop seeing Medicare patients.

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