Payroll tax deal would take first real bite from Obama's health law


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Savings include: 

• A $5 billion cut to the health law's $15 billion prevention trust fund; 

• The elimination of $2.5 billion in enhanced Medicaid payments to Louisiana in the wake of Hurricane Katrina;

• A $4 billion reduction in so-called Medicaid Disproportionate Share Hospital (DSH) payments to hospitals that take care of people without insurance;

• A $6.8 billion reduction in federal payments to hospitals that collect "bad debt" from insolvent patients, down to 60 percent; and 

• Cuts to how much Medicare pays for clinical laboratory tests.

The savings would pay to keep physicians' payment rates flat through the end of the year. 

The tentative deal also offers a 10-month extension of other, more targeted Medicare payments (ambulance add-on payments, the physician work floor and outpatient hospital hold harmless payments) but eliminates two programs Senate Democrats wanted extended (mental health add-on payments and a provision of the health law that increased payments for bone density scans). Two other programs — Section 508 hospitals and special pathology payments — would be phased out.

The specific saving targets aren't set in stone, however. 

Sen. Tom HarkinThomas (Tom) Richard HarkinOrrin Hatch, ‘a tough old bird,’ got a lot done in the Senate Democrats are all talk when it comes to DC statehood The Hill's 12:30 Report MORE (D-Iowa) is expected to object to the $5 billion cut to the prevention fund he championed, but might settle for a $4 billion cut, as called for in the president's budget released Monday. The health cuts might also be toned down, according to lobbyists, opening the way for other pay-fors such as Medicare cuts to home health payments and Graduate Medical Education payments to teaching hospitals.

"The devil's in the details," Rep. Xavier BecerraXavier BecerraOvernight Tech: States sue FCC over net neutrality repeal | Senate Dems reach 50 votes on measure to override repeal | Dems press Apple on phone slowdowns, kids' health | New Android malware found States sue FCC over net neutrality repeal Justice Department to appeal court's DACA ruling MORE (D-Calif.), one of the 20 members on the bicameral conference committee, said Wednesday morning. "We're still a long ways from getting there."

And House Speaker John BoehnerJohn Andrew BoehnerDems face hard choice for State of the Union response Even some conservatives seem open to return to earmarks Overnight Finance: Trump, lawmakers take key step to immigration deal | Trump urges Congress to bring back earmarks | Tax law poised to create windfall for states | Trump to attend Davos | Dimon walks back bitcoin criticism MORE (R-Ohio) said lawmakers have "an agreement in principle" but cautioned that "there are a lot of details that have yet to be worked out."