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Congress OKs Doc Fix, Payroll Tax-Cut Extension

Margaret Dick Tocknell, for HealthLeaders Media, February 17, 2012

[UPDATED 12:50 PM ET: The U.S. House of Representatives voted 293-132 Friday morning to pass a compromise bill that would delay the impending 27% cut in Medicare pay rates for 10 months. The Senate voted 60-36 to pass the measure.]

Congress has passed a legislative package that would delay massive Medicare reimbursement cuts for physicians for 10 months. The deadline to resolve the sustainable growth rate formula issue is now postponed until the end of 2012.

A joint House-Senate conference committee charged with negotiating a resolution to the sustainable growth rate formula issue, reached a tentative agreement late Wednesday night to delay for 10 months 27.4% in Medicare provider reimbursement cuts scheduled to go into effect on March 1.

Lawmakers finalized on Thursday details of The Middle Class Tax Relief and Job Creation Act of 2012. The timing is critical. Congressional leaders want to vote on the package before Congress adjourns for a one-week recess beginning this weekend.

In addition to delaying the Medicare reimbursement cuts, the legislation extends the payroll tax holiday through to the end of 2012, eliminates the extended unemployment benefits program, and extends certain welfare benefits programs through to the end of the year. The legislative package, which is summarized here, carries an estimated price tag of $150 billion.

According to a summary document from the House Ways and Means Committee, a grab bag of healthcare cuts will be used to offset the delay in the Medicare reimbursement cuts, including:

  • $11.6 billion in funding from the Patient Protection and Affordable Care Act, including $5 billion from the prevention fund
  • $9.6 billion from Medicare bad debt and clinical laboratory payments
  • $4.1 billion from the Medicaid Disproportionate Share Hospital payments
  • $2.5 billion in enhanced Medicaid funds earmarked for Louisiana

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