Senate Passes Critical Medicare Legislation

The Senate passed critical Medicare funding legislation by a cloture vote Thursday that would prevent the 10.6 percent cut to the Medicare physician fee schedule, extend the technical component grandfather clause, and repeal the laboratory competitive bidding demonstration project.

Aided by a dramatic return to the Senate floor by Sen. Edward Kennedy (D-MA) who has been diagnosed with brain cancer, the Medicare Improvements for Patients and Providers Act of 2008, H.R. 6331, passed by a 69-30 margin.

If signed into law, the bill will repeal Medicare’s laboratory competitive bidding demonstration project, replace the scheduled 10.6 percent cut in the Medicare Physician Fee Schedule with a 1.1 percent increase, and extend the technical component “grandfather” provision for 18 months.

The Centers for Medicare & Medicaid Services distributed a memo July 7 stating that the ability of independent laboratories to bill Medicare directly for the technical component of physician pathology services furnished to beneficiaries in hospitals expired June 30—however, the legislation passed today would extend the TC “grandfather” provision retroactively from the July 1 cutoff.

The legislation now goes to the President for signature or veto—the Administration has threatened to veto the bill due to provisions cutting funding for the Medicare Advantage program.

If the President vetoes the bill—a decision on which is anticipated in the coming days—it will return to House and Senate, where a two-thirds vote would be required to override it.

The House passed their version of the 2008 Medicare funding bill on June 25 by an overwhelming vote of 355 to 59.

CAP will keep you informed on this issue and other breaking news as more information becomes available.