Medical Billing Blog

SGR Update: March 28th House Edition

Posted by Scott Shatzman on Fri, Mar, 28, 2014 @ 10:03 AM

Yesterday, by a voice vote, the House of Representatives passed legislation postponing the 24% physician fee schedule cut slated to take effect on April 1, 2014.  However, the legislation went well beyond just temporarily fixing the SGR problem, it also made a number of other changes that will have long-lasting implications.  A listing of those changes is at the end of this message.


In addition to delaying the SGR cut, the legislation would also DELAY the scheduled implementation of ICD-10.  The bill prohibits the Secretary of HHS from mandating use of ICD-10 until October 1, 2015. Although the legislation must still pass the Senate, indications are that the Senate will go along with the House-passed bill. 



Summary/Highlights of SGR Patch Legislation

Protecting Access to Medicare Act of 2014


“Doc Fix”: Prevents the 24% cut in reimbursement to doctors who treat Medicare patients on April 1, 2014 and replaces it with a 0.5% (through December 31, 2014) and a 0% update from January 1 until April 1, 2015. 

Extends Medicare work Geographic Practice Cost Index (GPCI) floor for 1 year
Extends Medicare therapy cap exception process for 1 year ·
Extends Medicare ambulance add-on payments for 1 year
Extends Medicare adjustment for Low-Volume hospitals for 1 year
Extends Medicare-dependent Hospital (MDH) program for 1 year
Extends Medicare Advantage Special Needs Plan for 1 year
Extends Medicare Reasonable Cost Contracts for 1 year
Extends funding for National Quality Forum (NQF) through the first 6 months of fiscal year 2015
Extends funding outreach and assistance for certain low-income programs for 1 year
Extends Two-Midnight Rule Auditing program for Hospitals for 6 months
Technical Changes to Long-Term Care Hospitals
Extends Qualifying Individual (QI) Program for 1 year
Extends Transitional Medical Assistance (TMA) for 1 year 
Extends Medicaid and CHIP Express Lane Option for 1 year
Extends the Special Diabetes Program through fiscal year 2015
Extends Abstinence Education through fiscal year 2015
Extends the Personal Responsibility Education Program (PREP) through fiscal year 2015
Extends Family-to-Family Health Information Centers through fiscal year 2015 
Extends the Health Workforce Demo for Low-Income Individuals for 1 year
Extend funding for the Maternal, Infant, & Early Child Home Visiting for 6 months
Extends funding for the development of pediatric quality measures
Delays for 2 years the enactment of the Medicaid Third Party Liability Settlements
Delays the transition to ICD-10 under the Medicare program for 1 year.  
Repeals the ACA’s limitation on deductibles for small group health plans
Requires a GAO report on Children’s Hospital GME Program implementation


Demonstration Programs to Improve Community Mental Health Services:
Demonstration grants to implement Assisted Outpatient Treatment Grant Program for individuals with mental illness    


Skilled Nursing Facility (SNF) Value-Based Purchasing Program (VBP):
Establishes a Skilled Nursing Facility Value-Based Purchasing program based off of individual SNF performance on a hospital readmission measure.  


Medicare Lab Fee Schedule Reform:
Adopts market-based private sector payment rates for lab services.   


Medicare End Stage Renal Disease (ESRD) Prospective Payment System Revisions:
Prohibits the inclusion of the payment for the oral-only drugs that beneficiaries take related to their ESRD in the Medicare per-dialysis treatment bundled payment rate through 2024.  It spreads out the payment reduction required by the American Taxpayer Relief Act of 2012 to adjust for the reduced use of intravenous or injectable drugs that are paid through the bundle.  


Quality Incentives for Diagnostic Imaging & Evidence-Based Care:
Establishes CT equipment radiation dose standards for purposes of payment under the Medicare program in order to protect the health and welfare of beneficiaries.  Sets into place appropriate use criteria for imaging services paid to medical.   


Transitional Fund for SGR Reform:
Uses the $2.3 billion set aside for SGR in the Bipartisan Budget Act of 2013. 


Ensuring Accurate Values for Physician Fee Schedule Services:
Allows the Secretary of Health and Human Services to use information received from medical providers and other sources to adjust code pricing to address misvalued codes used under the Medicare Physician Fee Schedule. 


Medicaid Disproportionate Share Hospital (DSH) Relief and Rebase:
Delays reductions in payments to Disproportionate Share Hospitals by 1 year and then makes additional reductions through 2024. 


Medicare Sequester Realignment:
Realigns the Medicare sequester in 2024 without increasing the overall effect of the sequester on Medicare providers. 


Thank you to the GR Committee at the HBMA for contributing this article.