Congress passes a bill to extend Medicare cuts an additional year

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The Senate has passed a bill to extend 2% cuts to Medicare reimbursements for an additional year, and the measure is now headed to the White House for President Obama's signature.

The bill (S. 25) restores $6 billion that was cut from military pensions in the bipartisan budget agreement passed in December. To fund these pensions, lawmakers will extend Medicare cuts through 2024 — one year longer than was originally called for under the across-the-board spending reductions known as sequestration.

About $2.4 billion raised through this extension will help offset the cost of any permanent “doc fix” that is passed. The doc fix refers to changing the way physicians are reimbursed by Medicare.

A recent proposal would scrap the current Sustainable Growth Rate system, under which doctors would see a 24% pay cut after March 31. Under the newly proposed system, physicians would have their payments tied to quality measures.

Long-term care providers have called for a permanent repeal of the Sustainable Growth Rate. However, they argue that cutting reimbursements to the post-acute sector — which is reportedly under consideration — would not be an appropriate way to offset increased payments to doctors.

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