The Senate on Wednesday agreed unanimously to postpone for another year a steep cut in what Medicare pays doctors, clearing away one of the most pressing issues still on the congressional agenda.
The $19-billion bipartisan deal, which is expected to be approved by the House, would spare physicians who care for the elderly a 25% cut in their fees, and head off what many predicted would be a disastrous blow to the massive federal health insurance program.
The move was applauded by medical groups and advocates for the elderly, who have been lobbying Congress all year to avert the threatened fee cuts.
"Good things can happen for patients when Congress works to solve problems as opposed to using Medicare as a political football," Dr. Ralph Brindis, president of the American College of Cardiology, said after the agreement, which was reached between senior senators from both parties working with the White House.
President Obama also praised the compromise in a statement, while urging lawmakers to keep working on a permanent solution.
"For too long, we have confronted this reoccurring problem with temporary fixes and stopgap measures. It's time for a permanent solution that seniors and their doctors can depend on," the president said.
Democrats and Republicans have repeatedly promised a permanent fix to the arcane system that Medicare uses to pay physicians. But such a solution could cost as much as $300 billion, a price tag that has become increasingly difficult to offset as lawmakers face pressure to control federal spending.
The two parties could not agree on a way to reform the payment system in the healthcare overhaul that Obama signed in March.
The fee cuts were designed in 1997 to be phased in over many years as a way to control Medicare spending. But under pressure from physicians and others, lawmakers have repeatedly put them off. When deferred, the cuts accumulate, forcing lawmakers to scramble for "patches," a process that has wreaked havoc in doctors' offices nationwide.
The $19-billion cost of delaying the cuts for another year would be offset by changing the way the federal government provides health insurance subsidies to moderate-income people starting in 2014.
Under the change, recipients of these subsidies would have to pay back a portion if their income increased.