While news about the proposed so-called "doc fix"—a proposed delay for three more years for any physician payment cuts using the Sustainable Growth Rate formula—has dominated discussions in the $190 billion jobs and tax bill (HR 4213) the House plans to vote on this week, numerous other healthcare-related provisions have been attached to the bill as well.
COBRA assistance extension. In February 2009, the economic stimulus package created a program to provide a 65% COBRA health insurance premium subsidy for up to 15 months for employees who were terminated from their job. Under current law, eligibility for the COBRA premium assistance program was scheduled to terminate after May 31, 2010. A bill proposal would extend eligibility for the program for those terminated on or before Dec. 31, 2010. The federal cost of extending the benefit is $7.8 billion.
Fraud detection. The Centers for Medicare and Medicaid Services and Internal Revenue Service would create a new data match program to identify fraudulent providers. Under the current law, CMS and IRS are not authorized to exchange data for the purposes of addressing Medicare fraud and screening potential new providers. CMS will use the IRS data to identify possibly fraudulent providers sooner by determining whether providers applying to enroll or re enroll in Medicare have failed to file federal tax returns or have delinquent tax debts. This provision is estimated to save $400 million over 10 years.
Federal Medicaid Matching Rate extension. Under current law, the federal Medicaid matching rate is increased by 6.2% for all states (with additional percentage increases for states with high unemployment). These temporary increases were enacted under the economic stimulus bill last year in response to increased Medicaid caseloads and decreased state revenues. The increase was scheduled to expire on Dec. 31, 2010, which was problematic for most states now in the process of producing their current budgets for 2011. The bill would extend these increases for 6 months through June 30, 2011. The provision is estimated to cost $24 billion over 10 years.
Collection of employment taxes loophole. Social Security taxes are imposed on compensation and self employment income up to the Social Security wage base (currently $106,800), and the Medicare tax is imposed on all self employment and compensation income. However, some professionals, including physicians and other healthcare professionals, have avoided Medicare and Social Security taxes by routing their self employment income through an S corporation. The bill would clarify that those engaged in professional service businesses are unable to avoid employment taxes by routing their earnings through a limited liability corporation or a limited partnership. This proposal is estimated to raise almost $10 billion over 10 years.