06/18/2010 03:48 pm ET Updated May 25, 2011

Senators Cut Medicare Deal For Doctors, Leave Unemployment Issue Unfinished

Republican and Democratic Senate leaders cut a deal Friday to prevent a 21 percent pay cut for doctors who see Medicare patients, resolving one of the major sticking points from a stalled bill to reauthorize several expired domestic aid programs.

"Sometimes the Senate can be terribly disconcerting, aggravating, but that's the way the Senate is," said Senate Majority Leader Harry Reid (D-Nev.) on the Senate floor. "I'm glad we were able to work this out. This is extremely important for everybody and we're going to move on with the rest of the information in the bill and try to finish that at the earliest possible date."

The deal will preserve the so-called "Doc Fix" for six months while adhering to a Republican requirement that the measure's $6.5 billion cost not add to the deficit. But the House has to act before the law takes effect; Medicare announced shortly after the Senate acted that it would begin processing June claims at the reduced rate.

The Doc Fix lapsed at the beginning of the month, but the Centers for Medicare and Medicaid Services delayed the pay cut until Friday. Extended unemployment benefits and subsidies for laid-off workers to buy health insurance also lapsed at the beginning of the month. Since then, 903,000 people who've been out of work for longer than six months have found themselves ineligible for extended benefits originally provided by the 2009 stimulus bill.

"Clearly, the doctors have more lobbyists than the unemployed do," said Judy Conti of the National Employment Law Project. "While I have no objection to doctors being paid at appropriate levels for their skill and important work, this is a prospective solution to a problem that would decrease, not eliminate, their income. Currently, however, the UI programs have lapsed, over 900,000 long-term unemployed workers are without any income right now, and that number grows to 1.2 million next week."

Some Republicans and even Democrats suspect the unemployed of preferring to stay on extended benefits rather than looking for work.

"Let me just say to my friend, the majority leader, this is a good example of bipartisanship here," said Senate Minority Leader Mitch McConnell (R-Ky.). "I think we've come up with a proposal that achieves a goal that both sides wanted to achieve, which was to get a doctor fix for at least a six-month period of time and also it is paid for. So we've done it without adding to the deficit and I think that's something both sides can feel good about."

Sen. Max Baucus (D-Mont.) called the development a "good omen" for the rest of the bill, which had been winnowed down to meet the deficit reduction demands of Republicans and conservative Democrats in both chambers of Congress. This week the measure failed in two Senate votes before being abandoned in favor of Friday's piecemeal approach.

In May, the House cut out health insurance subsidies for laid-off workers, $24 billion in state Medicaid assistance, and a month of extended unemployment benefits, which would be renewed through November instead of for the rest of the year. Then Senate Democrats sacrificed $25 per week from every unemployment check and shortened the Doc Fix from 19 to just six months. Democrats' plans for the rest of the bill remain unclear.

The American Medical Association, which has focused its lobbying on fixing the underlying issue of doctors' Medicare compensation instead of repeatedly passing Doc Fixes, is not impressed by Friday's deal.

"Congress has finally taken its game of brinkmanship too far, as the steep 21 percent cut is now in effect and physicians will be forced to make difficult practice changes to keep their practice doors open," said AMA president Cecil Wilson in a statement that noted the House still has to approve the Senate's new version of the fix.