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  • 12-Month SGR Patch Approved in House While Congress Examines Permanent Repeal

    Recent advances made on a repeal of Medicare's flawed sustainable growth rate (SGR) and therapy cap may help chances of a permanent solution in 2015, but for this year at least, it appears Congress is opting for another temporary fix days before a March 31 deadline. The House bill that includes the 12 month patch also contains an unexpected provision—a delay on Medicare's implementation of the ICD-10 codes that had been set for an October 1 launch.

    With a looming March deadline that is set to trigger a 24% SGR cut, the House hurriedly voted on a bill that will replace the cut with a .5% provider payment update through the end of the year, and no update from January 1 to April 1 in 2015. The Senate is expected to vote on the patch by Monday, while the House passed the legislation on March 27 via an unusual voice vote that angered some Representatives on both sides of the aisle.

    In addition to the SGR fix, the legislation also continues extender provisions, including the therapy cap exceptions process and Geographic Pricing Cost Index (GPCI), until March 31, 2015.

    Somewhat surprisingly, the bill also contains a provision that delays the implementation of the International Classification of Diseases, 10th revision (ICD-10) for all HIPAA-covered entities. Prior to the action in Congress, the Centers for Medicare and Medicaid Services (CMS) made very public statements about its commitment to an October 1, 2014 rollout. Some observers speculate that the delay was included in the bill to make it more attractive to physician groups such as the American Medical Association (AMA), which opposed the fix in favor of hammering out a permanent repeal of SGR.

    Although members of both the House and Senate have recognized the need for permanent repeal and drafted bills to do just that, progress stalled when legislators were unable to agree on how the repeal would be paid for. House versions of the permanent repeal focused only on the SGR, while a Senate proposal would end both the SGR and the therapy cap. In press reports, both Speaker of the House John Boehner and Senate Majority Leader Harry Reid say they favor some form of permanent repeal, but that Congress once again ran out of time to work out the details.

    The approximate $20 billion cost of the temporary fix approved in the House will be paid for through a combination of cuts and programmatic changes that include reductions to clinical labs, radiology services, a delay on oral-only drugs for end-stage renal disease bundles, the establishment of a new value-based purchasing program for skilled nursing facilities based on performance around hospital readmissions, and a tightening up of code valuation under the fee schedule. Additional funds are identified through the use of SGR "transitional fund" money and an extension of Medicare sequester provisions.

    APTA continues to work with legislators toward a permanent end to the SGR and therapy cap, and will keep member advocates updated through PTeam alerts.


    • Let's be clear exactly what happened: The bill to repeal of the flawed SGR was the product of several years of collaborative work by the Republican and Democratic leaders of the key congressional committees that oversee the Medicare program. The leaders, from both houses of Congress, also got input and buy-in from physician groups, and from groups representing Medicare patients. It was about to be voted on. At the last minute Republicans attached an amendment to that bill that would allow for the repeal *only* if there was a five-year delay of the Affordable Care act's individual mandate penalty. In other words, Republicans loaded a poison pill into the bill that Democrats would never go along with. So, instead of a full repeal we get another 1 year "doc fix", wasting all the time and effort that went into crafting a solution to this problem.

      Posted by Red Raleigh on 3/28/2014 10:37 AM

    • When all else fails, blame the republicans. They are the root of all evil, especially in regards to healthcare.

      Posted by jason on 3/31/2014 2:44 PM

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