President signs bill to delay Medicare physician payment cuts (June 26, 2010)
On June 25, 2010, the President signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. (H.R. 3962) The Act cancels a 21% cut in payments to physicians that see Medicare patients through November 30, 2010.
The cuts were enacted into law in the late 1990s, but before they were ever implemented, Congress rethought the plan. Each year they act to make sure the reductions don’t occur. However, the issue is becoming increasingly politically difficult.
The Act pays for the fix by providing funding relief for some pension plans hard hit by the economic downturn by increasing the amortization period over which they may make up for funding shortfalls. While benefitting those plans by giving them a longer makeup period, it also benefits the IRS because the companies involved have higher taxable incomes in the makeup period due to lower pension contribution amounts.