On the evening of Monday, March 31st, the U.S. Senate passed H.R. 4302, "Protecting Access to Medicare Act of 2014
," legislation that contains both a one-year delay of the scheduled Sustainable Growth Rate (SGR) cut and a one-year delay of ICD-10 implementation. This vote marks the 17th time that Congress has applied a short-term patch to this formula that sets Medicare physician pay rates; currently the total amount spent on short-term patches (approximately $170 billion) is more expensive than the current projected cost of permanently repealing the SGR (approximately $140 billion).
Earlier on Monday, Senator Ron Wyden (D-OR) tried to bring a vote to use the Overseas Contingency Operations (OCO) funds to pay for the permanent SGR repeal legislation, but was unsuccessful.
H.R. 4302 contains a broad array of "extenders" as well as policy changes to offset the cost of the billion, which is around $16 billion. Some of the notable provisions include:
- The geographic adjustment (GPCI) "floor" of 1.0 of physician work in the Medicare fee schedule would be extended for 12 months to March 2015.
- Implementation of the ICD-10 diagnosis coding set would be delayed for one year, now starting on October 1, 2015.
- The HHS Secretary would have the discretion to continue suspending RAC post-payment audits under the "2-Midnight" policy through June 2015.
- Annual targets of 0.5% in savings from misvalued Medicare physician payment schedule services would be established from 2017 through 2020, for an estimated savings of $4 billion
- Revisions to the payment system for diagnostic tests and the laboratory fee schedule, based on market-based private sector rates, would be made for an estimated savings of $2.5 billion
- Payments for using CT equipment that does not meet certain dosage standards and implementation of appropriate use criteria for advanced imaging services would save an estimated $0.2 billion
- Revisions to the Medicare sequester in 2024 that effectively amplify the sequester's impact on all Medicare providers in that year would save an estimated $4.9 billion
Last Thursday, March 27th, in a very unusual procedural maneuver and with very few Representatives on the floor, the House passed H.R. 4302 by voice vote, bypassing the roll call process and allowing lawmakers to avoid being on record as for or against the legislation.
CMS has already issued a statement to Medicare providers that they will be holding MPFS claims for the first 10 business days of April so as to allow time for Congressional action to take effect and prevent the negative 24% cut from taking place.
Even with this latest patch, there is hope. The original bill permanently repealing the SGR still exists. It is now up to us, our Congressmen's and Senators' constituents, to encourage Congress to continue to work on a compromise for the permanent repeal of the SGR. This still can be accomplished before the end of the year.
History of the SGR Repeal
On February 6, the House Committees on Energy & Commerce and Ways & Means, and the Senate Committee on Finance reached a bipartisan, bicameral deal for the repeal of Medicare's sustainable growth rate (SGR) formula to fix the Medicare physician payment system. There are still more steps to come, including the cost of the bill from the Congressional Budget Office (CBO), the offset discussion in both houses and the inclusion of several missing issues. The discussions on adding those missing items, and how to pay for them, will continue in the coming weeks. Depending on what is included, and for how long, the costs could vary from an additional tens of billions to over a hundred billion dollars.
The current "patch" averting a 23.7% SGR cut expired MARCH 31, 2014.
To summarize the points of the legislation, please read below:
SGR Repeal and Medicare Provider Payment Modernization Act of 2014:
- Repeals the SGR and provides stability and 5 years of payment updates
- Repeals the SGR and replaces it with a system focused on quality, value and accountability
- Removes the imminent threat of draconion cuts to Medicare providers and ensures a 5-year period of annual updates of 0.5% to transition to the new system
- Improves the existing fee-for-service system by rewarding value over volume and ensuring payment accuracy
- Consolidates the three existing quality programs into a streamlined and improved program that rewards providers who meet performance thresholds, improves care for seniors and provides certainty for providers
- Implements a process to improve payment accuracy for individual provider services
- Incentivizes care coordination efforts for patients with chronic care needs
- Introduces physician-developed clinical care guidelines to reduce inappropriate care that can harm patients and results in wasteful spending
- Requires development of quality measures and ensures close collaboration with physicians and other stakeholders regarding the measures used in the performance program
- Incentivizes movement to alternative payment methods (APMs)
- Provides a 5% bonus to providers who receive a significant portion of their revenue from an APM or patient centered medical home (PCMH)
- Participants needs to receive at least 25% of their Medicare revenues through an APM in 2018-2019
- This 25% threshold will increase over time, and the policy also incentivizes participation in private-payer APMs
- Establishes a Technical Advisory Committee (TAC) to review and recommend physician-developed APMs based on criteria developed through an open comment process
- Expands the use of Medicare data for transparency and quality improvement
- Posts quality and utilization data on the Physician Compare website to enable patients to make more informed decisions about their care
- Allows qualified entities (QEs) to provide analysis and underlying data to providers for purposes of quality improvement, subject to relevant privacy and security laws
- Allows qualified clinical data registries to purchase claims data for purposes of quality improvement and patient safety
For more detailed information about the bill, please follow this link: The SGR Repeal and Medicare Provider Payment Modernization Act of 2014.
Unless Congress hears from you, there is little chance significant legislation can pass this year. Your members of Congress near to hear from you!!