- Associated Press - Thursday, November 18, 2010

WASHINGTON (AP) - Lawmakers have struck a deal to postpone a massive cut in Medicare pay for doctors, a senior congressional aide familiar with the details said Thursday.

The agreement among key Democratic and Republican senators would continue paying doctors at current levels through Dec. 31 and fully offset the cost. The aide spoke on condition of anonymity ahead of an official announcement.

The deal, expected to pass Congress, would stave off a 23 percent cut in doctors’ pay scheduled to take effect Dec. 1. Doctors had threatened to stop taking new Medicare patients if the cut went through, and experts warned that the situation would undermine the health care program for 46 million elderly and disabled.

The cuts are the consequence of a 1990s budget-balancing law that has failed to control Medicare costs. At the time, lawmakers devised a formula for automatic cuts as a braking system to keep Medicare spending in line. Except when costs went up, Congress usually hit the override button and prevented the cuts from taking place.


The cost of the one-month postponement, $1 billion over 10 years, will be paid for by changes in Medicare reimbursement for outpatient therapy services, according to a summary of the agreement provided to The Associated Press.

Lawmakers are pledging to work together on a 12-month reprieve, which would allow time to devise a different system for paying doctors. There’s widespread recognition that the current system is flawed because it rewards sheer volume of services, not quality results.