What emerged was a classic compromise that requires trade-offs from both parties.

Medicare is poised to overhaul the way it pays physicians and create new systems to reward high-performing doctors under legislation approved by the Senate late Tuesday.

The unusually bipartisan bill, which passed the House easily last month, will immediately lift the threat of an automatic 21 percent cut in Medicare fees to physicians, which was set to take effect Wednesday.

The legislation also marks a milestone in the push to modernize Medicare, the nation’s mammoth federal insurance program for the elderly, and move it away from the traditional system of paying physicians for every procedure they perform.

The bill passed with an overwhelming majority, 92-8. President Barack Obama has said he will sign it.

The legislation emerged from a compromise negotiated by House Speaker John A. Boehner (R-Ohio), House Democratic leader Nancy Pelosi (D-Calif.), and their lieutenants. It replaces an arcane Medicare fee system that has been widely criticized almost since its creation in 1997.

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