Update as of Friday, May 21, 2010:

As you may have read elsewhere, the Democratic House leaders are working up revisions to the tax extenders bill that will include a temporary fix – actually a three year deal – to address the looming 21% cut in Medicare physician payment rates. As you know, the third extension of 2010 expires June 1.

Under a deal crafted by House Ways and Means Committee Chairman Sandy Levin (D-Mich.) and Senate Finance Committee Chairman Max Baucus (D-Mont.), the payment will increase by 1.3% for the remainder of 2010. In 2011, the proposals adds an additional 1%. The updates for 2012 and 2013 be GDP+2% for E&M codes and GDP+1% for all other services.

After 2013, the payment formula would revert to the current SGR system meaning physicians would once again face drastic cuts – probably in the 30-33% range – unless Congress acts again in the future.

The tax extenders bill is expected to be considered by the House early next week. As always, it seems, they are running down to the wire to get this done before recessing for the Memorial Day break. The House probably has until mid week to pass it, which it is expected to do. Senate action will follow late in the week. Presumably.

This latest iteration of the “doc fix” provision is still being scored by the Congressional Budget Office, but is expected to come in at around $65 billion. This is less than the $88.5 billion cushion the House can use to pass legislation without offsets under pay-go rules.