By Rebekah Stone Hart

On Dec. 16, the House voted 395-34 to approve a $636.3 billion defense appropriations bill (HR 3326) that contained measures to extend COBRA health benefits and delay cuts in Medicare reimbursement rates. As of press time, the Senate is expected to hold a vote on the bill this month.

Thanks to a flaw in Medicare’s sustainable growth rate (SGR) formula, physicians were facing a cut of 21.2 percent in payments starting Jan. 1, 2010. The passage of HR 3326 (John Murtha, D-Pa.) will provide funding to delay for two months the planned cut in Medicare payments to physicians.

The SGR issue is a sticky one, with both bodies of Congress visiting and re-visiting the formula. A provision in the SGR formula calls for annual decreases in physician payments, and the cuts have to be corrected every year through congressional action, such as last year’s Medicare Improvements for Patients and Providers Act (MIPPA) of 2008.

Both the House and the Senate have passed proposals to more permanently fix the flawed formula. The most recent, The Medicare Physician Payment Reform Act (HR 3961), was passed by the House 243-183 on Nov. 19. It would repeal the scheduled reduction and replace the SGR formula with a permanent, more stable system — the Medicare Economic Index (MEI). HR 3961 (John Dingell, D-Mich.) would also repeal the $200 billion in debt associated with the SGR due to years of temporary fixes, according to the American College of Radiology.

A similar bill made its way to the Senate in October, only to be defeated 53-47, largely because that legislation would have offset the cost of the debt by adding it to the health care reform package that the Senate recently passed. Adding that debt to the reform legislation would have pushed the cost over the $1 trillion price limit that President Obama set for health care reform.

The new House bill will likely be decided in the Senate in early 2010, which necessitated further action to buy time in order to prevent the cuts in physician reimbursement from taking effect on Jan. 1 — hence the Dec. 16 appropriations bill, delaying the cuts until March.

HR 3326 does more than just delay Medicare reimbursement cuts. It also extends through February the COBRA program, which provides subsidies to laid-off workers who sign up and pay for continued COBRA insurance coverage. The program was initially passed as part of the 2009 economic stimulus package. A longer extension of the program will likely be included in a bill to be taken up next year.

In addition, HR 3326 would expand unemployment insurance and increase states’ federal medical assistance. These two measures, combined with the COBRA extension, would total $75 billion, CongressDaily reported.

Rebekah Stone Hart is the editor of the Healthcare Journal. She may be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .