General Information

Congress Passes Payroll Tax Conference Report, Physician Fee ‘Fix’

On Feb. 17, the House and Senate approved the payroll tax conference report, which includes payment relief for physicians using hospital payment cuts to offset the cost. The House vote was 293-132, with 91 Republicans and 41 Democrats voting against the measure. The California delegation supported the bill with a vote of 41-10. Soon after the House vote, the Senate passed the bill, 60-36. President Obama has indicated he will sign the legislation today.

On Feb. 16, congressional leaders and the bipartisan, bicameral conference committee considering H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2012, reached an agreement  to extend the payroll tax holiday, unemployment benefits and payment relief for physicians, all of which were set to expire February 29.  In a rare deal nearly two weeks before the deadline, Congress has passed legislation to resolve three key issues that led to gridlock and a short-term, two-month fix just before the end of 2011.

CHA has supported “fixing” the Sustainable Growth Rate (SGR) for physician payments, which, baring action, would have imposed a 27 percent cut in payments March 1, 2012.  However, we oppose using cuts to hospital payments to offset the cost of fixing the SGR.  Last year, the House passed a bill — opposed by CHA — that would have imposed more than $20 billion in hospital cuts nationwide and $2.2 billion in California. 

The agreement reached February 16 is notable as much for what is included as for what is not included.  Due to aggressive lobbying by hospitals, cuts to hospital outpatient evaluation and management payments and another coding offset were not included at all while the cuts to Medicare bad debt were significantly mitigated.

California members of the conference committee, Reps. Xavier Becerra and Henry Waxman, fought hard on behalf of hospitals.  We are grateful to them and all members of the California congressional delegation who advocated on behalf of California hospitals.  

For key provisions of the agreement, including estimated impact for California hospitals, go to (requires member log in).