American Taxpayer Relief Act Passes, Includes Imaging as Pay-For

January 7, 2013

American Taxpayer Relief Act Passes, Includes Imaging as Pay-For

On January 1, 2013 both the Senate (89-8) and the House of Representatives (257-167) passed H.R. 8, the American Taxpayer Relief Act of 2012.  This legislation most notably avoids the across-the-board tax increases that were set to take effect January 1, 2013.  However, H.R. 8 also blocks a scheduled 27 percent cut in reimbursements for Medicare physicians for one year.  This patch will be paid for by cuts and adjustments to other provider payments.

According to the Congressional Budget Office, the cost of this one year patch will be $25.1 billion over 10 years and the Medicare offsets and other provisions would reduce spending by $25.7 billion over the same time period.  In previous years, Congress has attempted to work on the Sustainable Growth Rate (SGR) and pass a permanent doc fix, but have not been able to agree on a solution.  As a result they have instead relied on a series of temporary patches.

In order to help pay for the one year SGR freeze, Congress approved increasing Medicare’s equipment utilization assumption for advanced imaging services from 75 percent to 90 percent effective with the 2014 Medicare Physician Fee Schedule (MPFS).

Health related provisions in the American Taxpayer Relief Act:

  • Extending the 2012 Medicare payment rates through December 31, 2013, thereby averting the 26.5 percent reduction that had been scheduled to go into effect on January 1, 2013.
  • Keeping the existing 1.0 floor on the physician work Geographic Practice Cost Index (GPCI) through December 31, 2013.

Additionally, the American Taxpayer Relief Act:

  • Makes permanent current marginal tax rates up to $400,000 for singles, $450,000 for married couples
  • Permanently extends:  15% top capital gains and dividends rate up to $400k (singles), $450k (married); 20% rate for both above threshold
  • Allows the temporary payroll tax cut to expire
  • Leaves in place the debt limit at $16.394 trillion
  • Turns off the sequester for two months
  • Extends unemployment insurance for one year

Attached below is a summary of health offsets contained in the American Taxpayer Relief Act of 2012.

CMS Update on Medicare Payment Rates

Summary of Health Offsets