Congress passes Medicare freeze

January 1, 2007

Washington, D.C.-As members of Congress headed out of town for the holidays in December, they managed to push through legislation containing a number of important policy initiatives for health plans and payers. A major tax bill delivered a reprieve for doctors from planned Medicare rate cuts. The bill freezes Medicare fees to physicians for one year, which could lead to an even bigger cut in 2008. It also offers a small bonus to those doctors who comply with quality reporting requirements. And to further bolster pay-for-performance initiatives, the legislation calls for hospitals and clinics to report on quality measures.

WASHINGTON, D.C.-As members of Congress headed out of town for the holidays in December, they managed to push through legislation containing a number of important policy initiatives for health plans and payers. A major tax bill delivered a reprieve for doctors from planned Medicare rate cuts. The bill freezes Medicare fees to physicians for one year, which could lead to an even bigger cut in 2008. It also offers a small bonus to those doctors who comply with quality reporting requirements. And to further bolster pay-for-performance initiatives, the legislation calls for hospitals and clinics to report on quality measures.

The mega tax bill also includes a long list of changes designed to make it easier for consumers to fund health savings accounts (HSAs) that mesh with high-deductible health plans. The measure boosts contribution levels for individuals, simplifies processes for shifting funds to these accounts and provides more flexibility for HSAs to cover preventive and maintenance drugs and to fund the purchase of Medigap coverage.

The tax bill also extended the research tax credit, which is important for biotech and medical technology companies that increase their investment in R&D every year. Legislation also reauthorized Ryan White AIDS treatment programs.