Congress has reached a deal on legislation that would extend the payroll tax holiday, extend unemployment insurance coverage, and rescue physicians from a 27 percent cut in their Medicare fees. The $150 billion package was worked out by House Ways and Means Chairman Dave Camp (R-MI); Senate Finance Committee Chairman Max Baucus (D-MT), House Speaker John Boehner (R-OH), and Senate Majority Leader Harry Reid (D-NV).
On Monday the House leadership agreed to allow the payroll tax holiday to be extended for a year without requiring an offset which CBO said would cost about $100 billion. This meant that the conferees needed to find only about $50 billion in spending cuts to offset the cost of the other two items allowing this legislation to move forward. There are no home health or hospice cuts or copays in the package.
To block the cut in reimbursement to physicians for another ten months, Inside Health Policy reports that the offsets include cutting Medicare bad debt payments for hospitals and nursing homes by about $6.9 billion over ten years; cutting clinical lab payments by $2.7 billion; rebasing Medicaid Disproportionate Share Hospital payments to save more than $4 billion; cutting the Affordable Care Act (ACA) prevention fund by $5 billion; and eliminating extra federal money provided by the ACA to Louisiana Medicaid, saving $2.5 billion.