House Set To Vote on Payroll Tax Break Bill That Includes ‘Doc Fix’

On Tuesday, the House is expected to vote on a payroll tax cut extension (HR 3630) developed by House GOP members that would offset a scheduled cut to Medicare physician reimbursements, the Washington Post reports (Helderman/Sonmez, Washington Post, 12/13).

Background

The plan -- the latest in a series of payroll tax break proposals from both parties -- would extend a $1,000 payroll tax break that is set to expire at the end of 2011. It also includes a two-year "doc fix" to stave off scheduled cuts to Medicare physician reimbursement rates.

The most recent "doc fix" bill, enacted in December 2010, is scheduled to expire on Jan. 1, 2012, at which point physicians face a nearly 30% payment rate cut. The payroll tax break extension instead would increase reimbursement rates by 1% over the next two years.

The plan would pay for the $38 billion fix in part by limiting Medicare benefits for high-income beneficiaries and by redirecting funding from the federal health reform law that was intended for prevention and public health services (California Healthline, 12/12).

Prospects for Passage

Although Democrats and the White House oppose non-health-related items in the plan, House Speaker John Boehner (R-Ohio) said he believes the proposal will pass the House. Boehner said Rep. Dan Boren (D-Okla.) pledged his support for the bill and predicted that other Democrats will follow suit (Washington Post, 12/13).

If the bill clears the House, it will face resistance in the Senate, where Senate Majority Leader Harry Reid (D-Nev.) has joined President Obama in objecting to a provision that would push ahead the stalled Keystone XL oil pipeline project (AP/Washington Post, 12/13).

Obama said he would veto the bill if it reached his desk with the Keystone provision (Mascaro, Los Angeles Times, 12/12).

Premium Increase Will Complicate Senate Passage

A provision in the payroll tax cut extension that increases Medicare premiums for high-income beneficiaries by 15% starting in 2017 might cause problems for members of the Senate, CQ HealthBeat reports.

A former Senate Democratic staffer said the Senate likely would not accept the provision as is. He said, "I would guess that if the Dems agree to something on this, they would design it so it hits higher income levels than under the House proposal -- and thus a lower percentage of beneficiaries."

AARP Opposes Premium Increase

AARP has publicly opposed the provision in the bill that would raise Medicare premiums, CQ HealthBeat reports.

Barry Rand, CEO of AARP, said that "high-income earners already contribute more to the program" than lower-income beneficiaries. He said the proposal might "result in higher-income beneficiaries leaving the Medicare program," which would "worsen the Medicare risk pool, leaving more costly beneficiaries in the Medicare program and thus raising costs for everyone else" (Reichard, CQ HealthBeat, 12/12).

Bill Benefits Physician-Owned Hospitals

The payroll legislation would benefit physician-owned hospitals by repealing and relaxing several provisions in the federal health reform law, the New York Times reports.

It would ease restrictions placed on the facilities by the reform law, allowing them to open if they were under construction at the end of 2010 and to expand if they already are operating (Pear, New York Times, 12/12).

Hospital Groups Oppose Cuts in Payroll Bill

Various hospitals groups oppose billions of dollars in cuts included in the payroll bill, The Hill's "Healthwatch" reports.

A lobbyist for the American Hospital Association sent congressional staffers an email saying that "several provisions in the bill ... will adversely affect hospitals in your district."

According to the AHA lobbyist, provisions that affect hospitals include:

• $10.6 billion in cuts to federal reimbursements for bad debts;
• $6.8 billion in cuts to hospital outpatient department evaluation and management services payments;
• $4.1 billion in cuts to payments for hospitals that disproportionately treat uninsured individuals; and
• An extension of caps on therapy services to outpatient hospital settings (Pecquet, "Healthwatch," The Hill, 12/12).

Public Health Groups Oppose Prevention Fund Cuts

Public health and prevention experts are criticizing a provision in the payroll bill that would cap the Prevention and Public Health Fund at $640 million annually starting in fiscal 2013 to pay for the doc fix, CQ HealthBeat reports.

Georges Benjamin, executive director for the American Public Health Association, said, "A very silly policy game is being played," adding, "Various parts of the health care (funding) bucket are being played off each other." Benjamin said that moving money from the prevention fund to physician reimbursements means "moving money around to the most expensive places" (Bristol, CQ HealthBeat, 12/12).