One-year Medicare Payment Cut Reprieve

Last week the U.S. House of Representatives passed H.R. 4994, the "Medicare and Medicaid Extenders Act of 2010," which will stabilize Medicare physician payments at current rates for 12 months—through the end of 2011—and stop the 25 percent cut that was originally scheduled to take effect on Jan. 1. The U.S. Senate has already passed the same piece of legislation and becomes law with the president’s signature. In addition to providing a 12-month reprieve from the Medicare physician payment cuts being produced by the sustainable growth rate (SGR) formula, the bill extends a number of other payment policies through 2011 that were originally set to expire at the end of this year, including: 

• The "floor" on geographic adjustments made for the physician work component of the Medicare payment schedule.

• The 5 percent payment increase for certain Medicare mental health services. 

• An exceptions process for the cap on Medicare outpatient therapy services. 

• Payments for the technical component for certain pathology services.