Congress Passes Legislation to Avert Medicare Physician Cuts and Extend Programs
Congress has passed legislation that prevents a 25 percent reduction in payments to Medicare physicians from taking effect on January 1. The bill, known as the Medicare and Medicaid Extenders Act of 2010, also prevents further cuts to physician payments effectuated under the Sustainable Growth Rate formula enacted by Congress in 1997, and maintains current Medicare physician payment rates through December 31, 2011.
The Medicare and Medicaid Extenders Act also extends a number of other programs that were set to expire on December 31, including the Qualified Individual (QI) Program and the Medicare therapy caps exception process. The legislation extends QI, a Medicare Savings Program (MSP) that helps pay Part B premiums for individuals with incomes between 120 and 135 percent of the federal poverty level, until December 31, 2011. The legislation also extends for an additional year the Medicare therapy caps exception process, which allows consumers to apply for exceptions to the $1,860 coverage limit for combined speech and physical therapy services and the $1,860 coverage limit for occupational therapy services if such services are medically necessary.
Read the House Majority Leaderís press release.
Read Joe Bakerís statement on the passage of the Medicare and Medicaid Extenders Package of 2010.
More Details on Doughnut Hole, Income-Related Part D Premiums
In just a few short weeks, the doughnut hole will begin to close in earnest. Until now, consumers who reached the doughnut hole—the coverage gap in Medicareís prescription drug benefit—have been responsible for paying the full cost of their drugs. But starting next year, these consumers will receive a discount on drugs they purchase while in the gap. This change to the Medicare drug benefit, also known as Part D, is the result of the Affordable Care Act (ACA), which gradually phases out the doughnut hole through the year 2020, when it will be completely eliminated. In 2011, people who enter the gap will receive a 50 percent discount on brand-name drugs and a 7 percent discount on both generic drugs and drugs compounded at the pharmacy. Furthermore, the 50 percent discount will count toward consumersí out-of-pocket limit, which is used to determine when they get out of the doughnut hole and enter catastrophic coverage. This means Medicare consumers will spend less while in the doughnut hole.
Also as a result of the ACA, the Social Security Administration (SSA) published an interim final rule regarding the assessment of higher Part D premiums for higher-income Medicare consumers beginning next year. From 2011 through 2019 individuals who have modified adjusted gross income (MAGI) at or above $85,000 per year and couples whose MAGI is at or above 170,000 per year will be subject to additional premiums for Part D. The premiums will be assessed on a sliding scale that is pegged to income levels. The extra amount will, in most cases, be directly deducted from the individualís Social Security check. While the income thresholds of $85,000 and $170,000 will be frozen through 2019, SSA may change them after that year.
The formula used to calculate MAGI is based on federal taxes filed two years prior to the year when the income-related premium assessment takes place. As under Part B, the rule states that individuals may request that SSA use more current tax data to calculate MAGI if they have experienced a major life-changing event, as defined by the regulations, or may appeal the misapplication of an income-related premium expense.
Read the Medicare Rights Centerís fact sheet: Health Reform and Medicare: The Doughnut Hole in 2011.
Read more about income-related Part D premiums.
Read the interim final rule on income-related Part D premiums.