This Week – April 15, 2011

This Week in Washington DC:

  1. Congress Approves Funding Measure While Proposing Changes to Medicare
  2. President Obama Signs IRS 1099 Repeal Into Law

Funding and the Future of Medicare
In similar fashion to what physicians have been experiencing with Medicare reimbursement and the sustainable growth rate (SGR), Congress passed yet another short-term funding measure last week and on Thursday agreed to keep the federal government running through FY 2011 with a package totaling $37.5 billion in spending cuts. The House also passed a measure to defund the entire health reform law but the measure failed to pass in the Senate.

The debate has now shifted to FY 2012 and the future of Medicare. Last week, House Budget Chairman Paul Ryan (R-WI) unveiled his fiscal 2012 budget plan, which calls for a $6.2 trillion reduction in federal spending and the eventual transformation of Medicare into a premium support program, plus the elimination of federal spending controls over Medicaid funding. President Obama on Wednesday firmly rejected Rep. Ryan’s Medicare changes and stressed the role of the health care overhaul law and an enhanced Independent Payment Advisory Board (IPAB), as the primary way that costs will be trimmed from Medicare. However, the House responded by taking up the Ryan proposal on Friday and passed the bill 235-193.

President Obama is looking to save $480 billion by 2023 from health spending. In his proposal, the President called for a “debt failsafe trigger” formula that would result in across-the-board spending cuts when debt is too high. While Medicare benefits would specifically be excluded, provider payments would not. The trigger would occur if, by 2014, the projected ratio of debt-to-gross domestic product is not stabilized and declining toward the end of the decade.

The IPAB is an entity created by the health reform law which, beginning in 2013, is charged with making recommendations to rein in Medicare spending if growth exceeds targets. The recommendations would have to be considered by Congress. The College has grave concerns over the IPAB’s role in Medicare reimbursement because the IPAB is forbidden by Congress to make cost-saving recommendations related to Medicare beneficiaries and hospitals (until 2019), leaving physicians in the cross-hairs of these cost-cutting proposals.

IPAB repeal legislation has been introduced in both the House and Senate. The College supports these bills and will update membership as Congress debates the future of Medicare and IPAB in the upcoming months.

IRS 1099 Provision Repeal Becomes Law
On Thursday President Obama signed into law the first significant revocation of a portion of the health reform law — a provision that required businesses including physician practices to file a Form 1099 with the IRS for every vendor to whom they paid more than $600 in a year.

The $22 billion cost of the 1099 legislation was offset by requiring some people, if their income level increases during the year, to pay back a portion of the subsidies they receive to join health insurance exchanges created under the law. The Senate passed the legislation 87-12 on April 5 after the House had passed the bill 314-112 in March.

Please stay tuned for further updates. Please also share and discuss your thoughts with fellow ACG members on the ACG GI Circle. To login and share your comments, visit If you have not yet activated your ACG GI Circle account, please email us at

Contact Brad Conway, VP Public Policy, with any questions or for more information.

Brad Conway