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Medicare Cuts To Hit In January If Payroll Tax Cut Fails

Medicare officials say hundreds of thousands of doctors will get a steep cut in payments on Jan. 18 unlessa gridlocked Congressissues a reprieve.

Cost of healthcare
Lilli Day | Photodisc | Getty Images
Cost of healthcare

A provision waiving a scheduled 27.4 percent cut in physician reimbursement was included in the payroll tax legislation now ensnared in partisan political wrangling.

On Monday, Medicare sent an alert to some 650,000 doctors telling them it will hold claims for the first 10 business days of 2012 unless Congress acts.

On Tuesday, deputy administrator Jonathan Blum said holding claims any longer could cause Medicare's computers to crash. That disclosure may come as a shock to lawmakers, since Medicare was able to hold claims for more than 20 days during a similar standoff last year during the summer.

Blum told The Associated Press that Medicare came very close to crashing its system in 2010. "That is something we feel we can ever repeat again," he said.

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