The Senate was one vote shy of the 60 needed to invoke cloture and allow consideration of the Medicare spending bill approved by the House with a wide bipartisan margin (H.R. 6331) and granting a physician fee increase from July 1 of this year through 2009. The stumbling block: GOP opposition to reductions in Medicare managed care payments to pay for the increase. The president has said he will veto any such reductions like those contained in H.R. 6331.

Under current law, the 0.5 percent increase in Medicare physician fees, in effect since the start of this year, expires Jun 30, and a 10.6 percent cut is required July 1 by the SGR update formula.

Also expiring June 30 is the “grandfather” protection that allows qualified independent clinical laboratories to bill Medicare separately for the technical component of anatomic pathology services to hospital patients. H.R. 6331 would extend the protection through 2009.

The Senate’s failure to act on a Medicare bill has left in the air the repeal of the Part B lab competitive bidding demonstration, already approved by the House. But the lab industry is optimistic that repeal will be part of a final bipartisan compromise in the Senate. It already is included in rival Medicare bills introduced by Finance Committee chairman Max Baucus (D-Mont.) and the ranking Republican, Charles Grassley (Iowa).