Congress Agrees on Two-Month Extension to Payroll Tax Cut and Extended Unemployment Compensation: "Doc Fix" and Outpatient Therapy Caps Exceptions Process Receive Similar Reprieve

The U.S. Congress passed a two-month payroll tax cut extension just eight days before its scheduled January 1, 2012 expiration after House Republicans dropped their objections under growing political pressure. President Obama signed the extension, guaranteeing that 160 million workers will continue to receive a two percent cut in their social security payroll taxes. Also included in the package was a freeze in physician Medicare payments, which avoided a massive 27.4% cut set for January 1, 2012; an extension of expanded unemployment compensation benefits; and an extension of the Medicare Part B outpatient therapy cap exceptions process under which SNFs and other providers can avoid therapy caps for certain patient diagnoses.

Congress will use the two-month reprieve to try to come to a full year agreement on the “extenders” package. The Senate and the President had supported a one-year extension, but the House had originally balked at the idea, accusing them of “kicking the can down the road” and failing to enact any long range deficit reduction legislation. A one or two-year extension will hinge on the ability of Congress to come to an agreement about how to pay for the various program extensions. Congress has appointed a conference committee to resolve the controversy. The committee has until March 1 to decide what to fix, for how long, and how to pay for it. None of the conferees named to date are from Indiana.

The original House version of the “extenders” package had called for a cut in federal reimbursement for public and private Medicare “bad debts” to 55 percent. Such a cut would have had a huge impact in states, like Indiana, whose Medicaid programs do not reimburse SNFs for Medicare Part A co-payments. We understand in this two month review, our industry is once again in Congress’ sights as potential “pay for” solution. Our national affiliate, the American Health Care Association, is following the issue closely and advocating for alternative funding sources such as savings from reduced re-hospitalizations.

We will bring you more information on the issue as it becomes available. Meanwhile, members with questions may call (317-616-9031) or email IHCA President Scott Tittle at stittle@ihca.org for additional information.