Medicare bill stops short in the Senate. Source: CNN

In the Senate, supporters of a bill that would close debate on a 10 percent cut in Medicare payments, scheduled to occur July 1, fell two votes short of the 60 needed for passage on June 26.

The bill, which was approved June 24 in the House by an overwhelming bipartisan vote of 355 to 59, would increase Medicare payments to physicians by 1.1 percent in January.

According to the New York Times, Nancy H. Nielsen, MD, president of the American Medical Association (AMA), said the cuts would force many doctors to “limit the number of new Medicare patients they treat.”

Senate Majority Leader Harry Reid, D-Nev., said passing a measure to halt a 10.6 percent reduction to Medicare physician fees scheduled to go into effect July 1 is a priority before the Fourth of July recess but had no specific plan to do so as of June 25, CQ Today reported.

President George W. Bush has threatened to veto the bill, in part because it would reduce federal payments to private Medicare Advantage plans, offered by insurers like Humana, UnitedHealth and Blue Cross and Blue Shield companies.

More than 10 million of the 44 million Medicare beneficiaries are in private Medicare Advantage plans. Many of these plans offer extra benefits. But studies have found that the private plans cost the government more per person than the traditional program, reported the NY Times.

CQ Today reported that "it is unclear when the Senate might be able to turn to the Medicare legislation" if Republicans do not agree to a vote on the House bill.

The American College of Radiology (ACR) said that in addition to preventing the physician pay cut, the failed legislation included two ACR-backed imaging utilization provisions: a mandatory accreditation requirement for providers of advanced diagnostic imaging and a demonstration program to test the use of imaging appropriateness criteria by referring physicians.

If the Senate does not approve the House bill, Congress could take up the issue again after the recess and pass legislation that retroactively restores the physician fee cut. However, such a move "could create headaches" for CMS officials and could disrupt payments to physicians, according to CQ Today.

While the Senate remains in session following the key vote, the House of Representatives has adjourned for a scheduled Fourth of July recess. Any changes to the current proposed Medicare legislation would have to be voted on by the House when they return on July 8.  Any subsequent action to avert the cuts will most likely be retroactive requiring significant administrative adjustments and the possible need for physicians to hold their submission of claims to Medicare.