Vernoia, Enterline + Brewer, CPA LLC

On April 16, President Obama signed the Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10), also known as the “doc fix” bill. In addition to overhauling Medicare’s payment system to physicians, the new law provides the IRS with enhanced levy authority to collect unpaid taxes from Medicare providers.

Background

Since 2003, Congress has regularly passed “doc fix” bills to avoid cuts in Medicare payments to physicians. The new law is intended to put in place a long-term fix to these cuts. The law repeals the prior payment mechanism and establishes a streamlined payment process. The law also increases, starting in 2018, the percentage that higher-income beneficiaries pay toward their Part Medicare B and D premiums. Additionally, the new law funds the Children’s Health Insurance Program (CHIP) though September 30, 2017.

The “doc fix” and extension of CHIP were the result of bipartisan agreements. The House approved the bipartisan bill in March by a vote of 392 to 37. The Senate voted 98 to 2 in early April to approve the bill.

IRS levy

Along with the “doc fix” and CHIP, lawmakers voted to give the IRS enhanced levy authority. The Federal Payment Levy Program (FPLP) authorizes the IRS to collect unpaid taxes through a continuous levy on certain qualified federal payments. Before being amended by the new law, Code Sec. 6331(h)(3) provided that a continuous IRS levy to collect an unpaid tax liability of a Medicare provider was limited to 30 percent of a qualified payment. Under the new law, the IRS can levy up to 100 percent of a qualified payment owed to a Medicare provider to collect an unpaid tax liability.

Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10).

%d bloggers like this: