Obama Signs Payroll Tax Legislation Delaying Physician Pay Cut for Two Months

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

President Obama Dec. 23 signed payroll tax cut legislation (H.R. 3765) that defers until the end of February a scheduled 27 percent Medicare pay cut for physicians.

The president signed the measure after the House and Senate approved it by unanimous consent earlier Dec. 23.

Passage of the Temporary Payroll Tax Cut Continuation Act of 2011 provides only temporary relief for physicians as they are now faced with another looming deadline in which their Medicare payments could be reduced. Physicians' Medicare reimbursement had been scheduled to be reduced Jan. 1 (247 HCDR, 12/23/11).

A House-Senate conference committee has been established to negotiate a package that would extend the payroll tax cut, including the physician payment provision, through the end of 2012.

The law also extends for two months expiring Medicare payment provisions for numerous providers, including hospitals, nursing homes, and ambulance service providers.

Physicians Relieved

Physicians expressed relief that the cut was temporarily canceled, but they renewed their call for lawmakers to permanently fix Medicare's reimbursement system for doctors.

“With this brief reprieve from the massive 27 percent cut to Medicare payments, Congress now has to enact a real and fiscally responsible solution to this sorry cycle of scheduled cuts and short-term patches that compromises access to care for patients and drives up costs for taxpayers,” the American Medical Association said in a Dec. 22 statement.

“Members of Congress need to use this time to work in a bipartisan manner to provide long-term stability for seniors, military families and the physicians who care for them,” AMA said.

“Eleventh-hour legislation that fails to meet the needs of constituents is no way to conduct the nation's business,” the American Academy of Family Physicians (AAFP) added in a Dec. 23 statement. “That is particularly true when millions of Americans' health and welfare are at stake.”

“But last-minute, inadequate legislation is exactly what Congress has done with passage of an absurdly short reprieve from the 27.4 percent cut in physician payment mandated by the deeply flawed sustainable growth rate formula for Medicare,” the association continued.

“Americans are tired of short-term, insufficient answers to long-standing problems. Americans want a permanent solution. They want Congress to look beyond the next few months or the next year. They want health security. Instead, they got a bitter holiday gift—an extra 60 days before health insecurity again sets in,” AAFP said.

Text of the law is available at http://op.bna.com/hl.nsf/r?Open=bbrk-8psvuf.  

Request Health Care on Bloomberg Law