WASHINGTON, DC—Congress skipped town for the July 4 vacation leaving behind a delayed-action legislative bomb for physicians treating Medicare patients: a 10.6% fee cut set to take effect July 1. On Monday morning, the Bush administration acted to pull back the system from what American Medical Association president Nancy H. Nielsen, MD, had described as “the brink of a Medicare meltdown.”

“By holding claims for healthcare services that are delivered on or after July 1, CMMS will not be making any payments on the 10.6% reduction until July 15 at the earliest.”—Kevin Schweers
Department of Health and Human Services (DHHS) spokesman Kevin Schweers said Monday that the Centers for Medicare and Medicaid Services (CMMS) would hold Medicare claims delivered on or after July 1 until at least July 15, in the apparent hope that on July 7 Congress will return to act quickly in preventing the fee cuts, which will otherwise occur because of a formula that requires such cuts when spending exceeds target goals.

Spending has exceeded those targets almost every year, and Congress has typically found a way to block the required cuts—until now. This year, in an apparent bid to drive its approval ratings down below the current 13%?the lowest in recorded history—Congressional Republicans and Democrats failed to agree on a way around the fee-cut requirement.

Congressional Democrats pushed for cutting the Medicare Advantage program, which Republicans and the Bush administration support because it lets seniors get their benefits through private insurers rather than through traditional Medicare. The administration threatened to veto any bill that contained cuts to Medicare Advantage. Last Tuesday, the House approved the legislation by a veto-proof 355-359, but Senate Republicans fell one vote short of the 60 needed to block the fee cuts.

On Friday, DHHS Secretary Mike Leavitt promised to “take all steps available to the department under the law to minimize the impact on providers and beneficiaries.” Today the department announced that it will use administrative delay to slow the move to the scheduled cuts, which would affect about 600,000 doctors.

“By holding claims for healthcare services that are delivered on or after July 1, CMMS will not be making any payments on the 10.6% reduction until July 15 at the earliest,” Mr. Schweers said.