House Adopts Physician Fee Schedule Fix - November 24, 2009

By a vote of 243 to 183, the House of Representatives adopted legislation, the Medicare Physician Payment Reform Act of 2009 (H.R. 3961), to eliminate a scheduled 21 percent reduction in Medicare physician payments in 2010. In addition to preventing these cuts, the legislation revises the Medicare physician fee schedule formula by 1) eliminating the formula’s heavy reliance on the gross domestic product and 2) excluding items, such as chemotherapy drugs and laboratory services, that are not paid under the Medicare physician fee schedule from the fee schedule calculation. To secure the votes necessary to adopt the $210 billion bill, House leaders agreed to attach previously adopted legislation reinstating statutory “pay as you go” (PAYGO) rules when the bill is sent to the Senate for consideration. Prospects for Senate adoption remain dim, as there is little support in the Senate for statutory PAYGO legislation, which would impose a legal requirement that all new tax and spending policies be offset by comparable spending reductions.