Medicare: Congressional Tax Committees Release Bill with SGR Fix

Congressional leaders on the House Ways and Means and Senate Finance committees have released the purported “tax extenders” bill (HR 4213), which among other things would raise doctors’ Medicare reimbursements 1% to 2% through 2013.  

 

Specifically, physician Medicare reimbursements would rise by 1.3% in 2010 and by an additional 1% in 2011.  As an incentive to enter and practice preventive and primary care, 2012 and 2013 payments to doctors that offer primary care and preventive services would increase at the same rate as the gross domestic product plus 2%.  Those not offering primary care and preventive services would receive an increase of GDP rate hike plus 1%.

 

If enacted the bill would increase physicians’ payments by approximately $60 billion over the next three years and offset the planned 21% cut, resulting from the Sustainable Growth Rate (SGR) calculation, which was approved last month and scheduled to take effect on June 1.

 

Other features of the compromise bill include:

·         A six month extension to the temporary increase in state Medicaid funding, also known as Federal Medical Assistance Percentages (FMAP). FMAP was due to expire at the end of 2010. If enacted, the FMAP extension would cost $24 billion over the next decade.

·         A benefit and eligibility extension for COBRA coverage and a series of coverage related tax cuts and subsidies.  The COBRA subsidy is estimates to cost $7.8 billion over the next decade.

 

The Joint Committee on Taxation (JCT) has released a score on the tax elements and the Congressional Budget Office (CBO) has released an estimate of the bill’s budgetary impact. It is not deficit neutral as spending on COBRA, Medicaid and unemployment is treated as emergency spending. Such outlays, including the SGR change, are exempt from conforming to new pay/go rules enacted earlier this year.

 

Click here to read why the American Academy of Family Physicians called these provisions a “bonus” to medical students.

Click here to read why the American College of Cardiology supports this measure.

Click here to access the CBO report.

Click here for JCT’s summary of revenue effects of the bill.

Click here to access the full JCT report.