The House and Senate today passed legislation by unanimous consent that defers for two months a scheduled 27.4 percent cut in Medicare physician payments. Included as part of a package that extends a payroll tax cut and unemployment insurance, the bill prevents the cut in the Medicare Sustainable Growth Rate from occurring on January 1, 2012. The cut is now scheduled for February 29, 2012 and payments will be frozen at their current levels until then. President Obama is expected to sign the bill.

The bill extends a number of expiring Medicare provisions. For example, the bill extends the Medicare therapy caps exceptions process until February 29, 2012 and the Medicare work geographic adjustment floor is extended to March 1, 2012. The legislation also extends for two months the Sec. 508 hospital wage index reclassifications. The “ambulance add on” provisions included in the health reform law that increase the ambulance fee schedule amounts for covered ambulance transports also were extended for two months. The hospital outpatient hold harmless provision also was extended until March 1, 2012.

The House and Senate have adjourned for the year and will return in January to continue negotiations on a year-long extension of the provisions. At issue is how to design and fund the various Medicare extensions, the Social Security payroll tax cut, and unemployment insurance. Senate Majority Leader Harry Reid (D-NV) has named Senate Finance Committee Chairman Max Baucus (D-MT) and Sens. Ben Cardin (D-MD), Jack Reed (D-RI), and Bob Casey (D-PA) as conferees to negotiate an agreement with the House. House Speaker John Boehner (R-OH) earlier named Reps. Tom Price (R-GA), Renee Elmers (R-NC), Nan Hayworth (R-NY), Dave Camp (R-MI), Fred Upton (R-MI), Kevin Brady (R-TX), Tom Reed (R-NY) and Greg Walden (R-OR).