One-year Medicare payment cut reprieve signed into law

On December 9th, the U.S. House of Representatives passed H.R. 4994, the “Medicare and Medicaid Extenders Act of 2010,” which would stabilize Medicare physician payments at current rates for 12 monthsthrough the end of 2011and stop the 25 percent cut that was originally scheduled to take effect on Jan. 1. The U.S. Senate passed the same piece of legislation by unanimous consent yesterday, Dec. 8. President Obama signed the legislation December 15, 2010. 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. • The bill also includes a one-year reprieve for the pathology grandfather protection that expires Dec. 31. This allows certain independent labs to continue to bill Medicare Part B for the technical component of anatomic pathology services to hospital patients through all of 2011.