Senate passes 1-year doc fix

The Senate passed on Wednesday night a one-year, fully paid-for fix to Medicare rates that would avoid a scheduled 25 percent cut to physician payments on Jan. 1.

The bill, which passed the Senate by unanimous consent, taps into subsidies for state-run insurance exchanges created by the new healthcare reform law to pay for the $19.2 billion fix to Medicare physician rates.

The healthcare reform law creates state-run exchanges through which certain people may purchase insurance starting in 2014. The law provides subsidies for those under a specified income limit — about $88,000 for a family of four — and includes recapture penalties to those whose income exceeds the limit. The reform law provided a flat-cap penalty of $250 for individuals and $400 for families, but the so-called "doc fix" agreement is funded by higher penalties to those with higher incomes.

Staffers for Majority Leader Harry Reid (D-Nev.), Minority Leader Mitch McConnell (R-Ky.), Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) hammered out the agreement over the past few days and announced it Tuesday night.

President Obama voiced his support for the measure Wednesday afternoon and urged leaders to develop a more permanent fix to Medicare physician payments.

"I am pleased Democratic and Republican leaders in the Senate have agreed on legislation that will prevent a significant pay cut for doctors from taking effect and help ensure seniors on Medicare can continue to see the doctor they know and trust," Obama said in a statement.

The legislation also extends a number of Medicare provisions, including an extension of the therapy caps exception process through Dec. 31, 2011, for $900 million over 10 years.

It also would repeal a delay in the implementation of the new Medicare payment structure for nursing homes. The nursing home industry had been pushing hard for a repeal of the delay, which was included in the healthcare reform law. The new payment system would be effective Oct. 1, 2010, instead of Oct. 1, 2011, if the doc fix becomes law.

The House must still approve the bill before Obama can sign it.