Updated 5/26/2010

With the Memorial Day recess just days away, the House and Senate Democratic Leaderships are struggling to find the votes necessary to pass the new tax extender bill “"American Jobs and Closing Tax Loopholes Act" (H.R. 4213)”, which includes the most recent proposal to avert the 21.3 percent Medicare physician cut scheduled to take into effect June 1st.

This bill, estimated to cost $192 billion over 10 years, is only partially funded and will add about $134 billion to the deficit over the next decade. As a result, enough votes to pass this bill cannot be counted on.

In order to ensure enough votes to pass a tax extender bill, Democratic leadership is now considering scaling it back. As a result, rumors are that the proposal to avert the physician payment cut would likely change, and could be anywhere from a 30 day freeze to a 7 month freeze.

The Heart Rhythm Society will continue to monitor the legislation and will provide a detailed summary as soon as possible to keep members informed.

Medicare Physician Payment Cut—Update as of May 21, 2010

The 21.3 percent cut in Medicare physician reimbursement is scheduled to take effect on June 1, 2010 and Congress is currently working on a draft proposal to avert these cuts. While several ideas were dismissed earlier this month, the most recent proposal was released on Thursday, May 20, as part of the new tax extender"American Jobs and Closing Tax Loopholes Act" (H.R. 4213), and includes the following changes:

• 1.3 percent Medicare payment update for the remainder of 2010
• 1.0 percent payment update in 2011
• Updates for 2012-13 are established under two expenditure targets:
• • Evaluation and Management Services (E&M) plus preventive services, which would be based on GDP +2
  • All other services would be based on GDP +1
• In 2014 and thereafter, the Medicare physician payment system will reverse back to the sustainable growth rate formula or SGR formula (currently in place) with a projected cut around 35 percent.

The service categories used in 2012-2013 would apply without consideration to the specialty of the physician providing the service. During the two-year period when the two expenditure targets are in place, an update floor will be set at zero (i.e updates for both service categories cannot be negative in either of those years.)

Many Republicans have expressed concerns with the package's price tag, as it is not fully offset by new revenues. Democratic leaders in both the House and the Senate have indicated that this proposal is the best option for now. In the House, the so-called Blue-Dog Democrats are skeptical regarding support for the cost, and on the Senate side, at least two Republicans must vote in favor of this package to achieve the 60 votes to prevent a filibuster.

The Heart Rhythm Society and other medical specialty societies continue to voice concerns about this proposal, since it will resort back to the SGR formula in 2014 with a projected cut around 35 percent.

H.R. 4213 is expected to be considered on the House floor early next week. The Senate would then vote on this bill after the House approves it.