Increase in physician payment update; extension of the physician quality reporting system. Replaces the scheduled 10.1% cut to the Medicare physician reimbursement rate in 2008 with a 0.5% increase through June 30, 2008. Extends the physician quality reporting system. Revises the Physician Assistance and Quality Initiative fund.

Extension of incentive payment program for physician scarcity areas. Extends a provision that provides a 5% bonus payment to physicians practicing in physician shortage areas through June 30, 2008.

Extension of the floor on work geographic adjustment. Extends for six months the work geographic index (GPCI) floor of 1.0 through June 30, 2008.

Extension of treatment of certain physician pathology services. Extends for six months the provision that allows independent laboratories to continue to bill Medicare directly for the technical component of certain physician pathology services provided to hospitals as authorized by the Balanced Budget Act of 1997 through June 30, 2008.

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