Congress, specifically the Senate, failed to act at the last minute to avert the 10.6% conversion factor reduction effective July 1st 2008.
The issue is not a disagreement surrounding the need to delay the 10.6% cut for 18 months. The disagreement is specifically surrounding where the money to pay for the delay will be derived.
The Senate Republicans used a filibuster at the last minute to block the passage of the bill, which means once the legislature returns in mid-July, they can take up the argument once again. The bill therefore is not dead but simply on a procedural level hold. The bill passed in the House on a veto proof margin. At issue with the current bill is the funding of the conversion factor delay with money from the Medicare Advantage program.
The real issue is politics. The administration, and therefore the republicans want to continue to incentivise the insurance companies to privatize Medicare. The democrats want to stop the added incentive payment. Medicare Advantage plans are paid a “bonus” of about 17% over fee for service Medicare (including physicians payment).
Each week that the federal government delays on this bill, it will obviously cost physicians money even if they decide to make the conversion factor delay retroactive to July 1, 2008. Additionally it will cost the federal government $100 million per week to go back and refund that additional money. That being said, Physicians and Medicare beneficiaries still hope that this conversion factor reduction will be reversed and the reversion will be retroactive to July 1st, however, in an election year and with the current political climate, there is some doubt over whether or not this can be solved in a reasonable time frame.
