Vote Smart's Synopsis:

Vote to pass a bill that restructures the Medicare Sustainable Growth Rate payment system and that reinstates the statutory Pay-As-You-Go budget rule.

Highlights:

• Updates the single conversion factor for 2010 to equal 1.2 percent, equal to the percentage increase in the Medicare Economic Index (MEI) (Sec. 2).

• Rebases the Sustainable Growth Rate for 2011 and later years by making 2009 allowed expenditures equal to the amount of actual expenditures for physician's services for 2009 and by using 2009 (or, if later, the first day of the fifth year before the year involved) for future update adjustments (Sec. 2).

• Separates physician services into two general general categories, (1) evaluation, management, and preventive services and (2) all other services, and applies separate conversion factors for each service category (Sec. 2).

• Reinstates the Pay-As-You-Go (PAYGO) budget rule, a rule that applies to bills or joint resolutions that affect direct spending or revenue relative to the baseline and that requires such bills to be budget-neutral (Secs. 102 & 103).

• Requires PAYGO legislation to make reference to the bill's estimated budgetary effects, as shall be provided by the Congressional Budget Office, before it is voted on (Sec. 104).

• Requires the Office of Management and Budget to maintain and make public on every piece of PAYGO legislation two sets of scorecards, which shall measure the budgetary effects of such legislation over 5 years and over 10 years (Sec. 104).

• Requires the Office of Management and Budget at the end of every Congressional session to publish and make public a PAYGO report, which shall include the following (Sec. 105):
• Current PAYGO scorecards on all PAYGO legislation;
• Any current policy adjustments;
• Information about any emergency legislation;
• Sequestration orders that show how direct spending will be adjusted to offset any costs shown on PAYGO scorecards; and
• Other data that would "enhance public understanding" of the above items.

• Requires the Office of Management and Budget to calculate the uniform percentage of funds that are to be seized in order to balance spending, and specifies that any uniform percentage exceeding 4 percent shall result in Medicare spending reductions of 4 percent, as well as spending reductions in other nonexempt direct spending programs (Sec. 106).

• Resolves that unique PAYGO scoring rules will apply to one of the four budget areas (Sec. 107):
• Legislation that amends or supersedes Medicare physician fee schedules;
• Legislation that amends portions of the United States Tax Code governing estate and gift taxes;
• Legislation that affects the Alternative Minimum Tax (AMT); and
• Legislation affecting certain provisions of the Economic Growth Tax Relief Reconciliation Act of 2001 or the Jobs and Growth Tax Relief Reconciliation Act of 2003, as well as certain provisions of later statutes amending the aforementioned Acts.

• Lists several other federal programs and activities that would be exempt from payment reductions, including Social Security Benefits and Tier I Railroad Retirement Benefits, Veterans Programs, and Refundable Income Tax Credits (Sec. 111).

Full Bill Text

Full Bill Text