Senate Passes Bill To Repeal SGR

Late yesterday, the Senate voted to pass H.R. 2, repealing the Medicare Sustainable Growth Rate (SGR), putting physicians on a two-track payment system that will continue a federal push toward risk-based payment models, including ACOs and bundled payment models. By 2019, physicians will have to have at least 25% of Medicare revenue tied to payment models to quality for higher payments and the number will triple in 2023. Senators also attempted to pass six amendments to the bill, but all failed. The bill also includes a six-month delay in enforcement of CMS’ “two midnights” payment policy for short hospital stays.

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Important Medicare Physician Fee Schedule Update

The Medicare Physician Fee Schedule (MPFS) was updated using the Sustainable Growth Rate (SGR) Methodology as required by law. Beginning April 1, 2015, the SGR methodology required a 21% decrease in MPFS payments.

CMS took steps to limit the impact on Medicare providers and beneficiaries by holding claims paid under the MPFS with dates of services on and after April 1, 2015. Medicare is also holding therapy claims that no longer qualify for the therapy cap exceptions due to the expiration of the therapy cap exceptions process on April 1, 2015. In an effort to avert the negative update, “CMS must update payment systems to comply with the law, and implement the negative update.”

“Beginning on April 15th, 2015, CMS will release held MPFS claims, paying at the reduced rate, based on the negative update, on a first-in, first-out basis, while continuing to hold new claims as they are received. CMS will release one day’s worth of held claims, processing and paying at the rate that reflects the negative update. At the same time, CMS will hold the receipts for that day, thus, continuing to hold 10 days’ worth of claims in total. This is to provide continuing cash flow to providers, albeit at the rate that reflects the negative update. This “rolling hold” will help minimize the number of claims requiring reprocessing should Congress pass legislation changing the negative update.”

Please be aware that claims for services furnished on or before March 31, 2015 are not affected by the payment cut and will still be processed and paid under normal time frames.

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*Information provided by NGS. 

CMS To Delay Rate Cuts To Physicians

CMS has said that it will hold physician claims for 14 calendar days and delay the 21% rate cuts that are otherwise set to take effect Wednesday. Last week, the Senate recessed without acting on H.R. 2, which has been approved by the House already. Senate officials want to reassure everyone that the two-week delay will not impact doctors. The Senate will have only two days to act on the bill before the rate cuts take chunks out of payments sent to doctors. The Senate reconvenes on April 13.

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House Passes SGR Reform Bill

Yesterday, a majority passed Medicare legislation that reforms the physician payment formula also known as the Sustainable Growth Rate (SGR). H.R. 2 will now go to the Senate where it is expected to pass.

The bill includes the previously reported provisions that affect home health and hospice services:

  1. The annual payment rate update (Market Basket Index) is set at 1% in 2018. This represents an estimated 1 point reduction from what would otherwise be the update
  2. A two year extension of the home health rural add-on at 3%. Under the bill, the add-on would expire with episodes beginning January 1, 2018 and later.
  3. Modification of the home health surety bond requirements setting the bond minimum at $50,000 and allowing Medicare to scale the bond value up commensurate with the volume of Medicare revenue in the home health agency.

The Medicare beneficiary changes do not include a home health copay.

The bill “would institute a permanent fix in the physician payment methodology” which is good news for Medicare providers as there have been 17 previous “patches” that were financed by cutting provider payment rates.

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Bills to Replace SGR Have Passed House and Senate Committees

Bills to replace Medicare’s physician payment formula commonly known as the “doc fix” have passed the House and Senate committees but the final passage is not expected until 2014.  The versions of the bill which would authorize a new payment system linking pay increases to quality care improvements was approved 39-0 by the House Ways and Means Committee and through voice vote by the Senate Finance Committee.  The newly proposed legislation replacing the sustainable growth rate formula (SGR or “doc fix”) will freeze rates for 10 years for physicians who choose not to participate in the new pay-for-performance arrangement. Additionally, the bills approved would “combine Medicare’s existing quality programs-including meaningful use of electronic health records, the Physician Quality Reporting System and the value-based modifier-into one value-based performance program; incentivizes physicians to move from fee-for-service to payment models focused on coordination and prevention; and give more access to information to patients and physicians.”  The formula would lead to a 20.1 percent cut in Medicare physicians rates in January without any congressional action.

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Fiscal Cliff Averted, 2% Medicare Sequester Cut Looms

Last week, the House voted in favor of a legislative package approved by the Senate in the early hours of the morning that postponed a 26.5% cut to physician pay rates mandated by the sustainable growth rate formula (SGR).

But the latest efforts only freezes doctor pay rates only through the end of 2013, when the formula is set, once again, to slash rates without a legislative revision.  A 2% Medicare sequester cut set for March also looms.

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