Legislation to avert a 10.1 percent cut in Medicare payments to physicians was signed by President Bush on December 29th.  The bill provides physicians with a temporary 0.5 percent increase in payments for six months ensuring that Congress will take-up the issue again in 2008.  If Congress does not act on the issue by June, physicians will see the 10.1 percent cut go into effect.  The American Medical Association said they were "disappointed" with the temporary patch and will urge Congress to pursue a long-term solution to the problem when members return from recess.

In addition to the Medicare payment fix, the legislation provides funding for the State Children's Health Insurance Program (SCHIP) until March 2009.  During the last several months of 2007, the House and Senate tried to work with each other and the White House to come to a compromise on the reauthorization of SCHIP and the Medicare package.  An additional $1.6 billion was included in the bill to prevent projected shortfalls that numerous states had anticipated in 2008.