Congress Passes 10 Month SGR Fix

February 17, 2012

Late Friday morning, the House of Representatives (293-132) and the Senate (60-36) passed the bipartisan agreement on legislation to extend the payroll tax holiday through the end of the year.  This follows the short term fix that was passed in December.  The legislation will now be sent to President Obama, who is expected to sign it.

Under this deal, which extends through the rest of 2012, the nearly $100 billion payroll tax cut would not be paid for, a result of Congress’s inability to compromise on new taxes or offsetting spending cuts.  In addition, unemployment benefits would be extended.

Most important to SNM members, this agreement prevents a fee cut to Medicare providers, known as the "doc fix."  There are no specific cuts to imaging included in the offsets.

SGR Offsets:

  • $6.9 billion by reducing Medicare bad debt reimbursement
  • $2.7 billion from resetting clinical lab payment rates
  • $4.1 billion from rebasing Medicaid Disproportionate Share Hospital allotments
  • $2.5 billion from eliminating Medicaid payments to Louisiana
  • $5 billion by reducing the health reform law's prevention fund

The final agreement also includes the following short-term extenders:

  • Higher wage payments to Section 508 hospitals through March 31, after which the program will terminate
  • Hospital outpatient hold-harmless payments for small rural hospitals with 100 or fewer beds through Dec. 31
  • Physician work geographic adjustments
  • Outpatient therapy caps through Dec. 31
  • Ambulance add-on payments through Dec. 31
  • Payment for technical component of certain physician pathology services through June 30

Other health provisions contained in the agreement include:

  • An extension of the Medicare Qualifying Individual program through Dec. 31
  • An extension of Transitional Medical Assistance through Dec. 31