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Congress acts to fix the Medicare SGR

November 14, 2013
by Bob Gatty
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There are signs that Congress may finally end the annual Medicare fee payment crisis that has plagued physicians for years, but the question remains whether lawmakers will reduce payments for long term care services in the process and perhaps end up with a hard cap on outpatient therapy services in 2014.

On October 31, the House Ways and Means Committee and the Senate Finance Committee released a bipartisan discussion draft outline of legislation intended to permanently fix the broken Medicare sustainable growth rate (SGR) formula.

Almost amazingly, the proposed deal was finalized between Republicans and Democrats in both the House and the Senate during the contentious period of partisan wrangling over the debt ceiling and the government shutdown. But it was done, and if accepted by both houses of Congress would freeze current physician payment levels through 2023 and then provide annual 2 percent payment increases to those who participate in such payment models as accountable care organizations and patient-centered medical homes. Other providers would receive a 1 percent increase.

Without congressional action on at least a temporary solution, Medicare physicians face a 24.4 percent payment cut effective January 1, the result of annual temporary fixes enacted by Congress each year for the past decade to avert SGR required cuts. However, the proposal does not include measures to pay for repealing SGR, estimated at about $139 billion over 10 years.

The House Energy and Commerce Committee in July approved SGR reform legislation that includes a 0.5 percent annual update to physicians through 2018, and Committee Chairman Fred Upton (R-MI) and the panel’s top Democrat, Rep. Henry Waxman (D-CA), welcomed the new plan.

“Today’s announcement is good news,” they said in a joint press release. “We look forward to working with our colleagues to enact a permanent solution that protects beneficiaries, moves Medicare for paying for value, not volume, and incentivizes new models of Medicare this year.”

For long-term care providers, the deal could be a mixed blessing, depending on what offsets are devised during additional congressional negotiation to cover the cost of the reform. Thus, the industry is wasting no time in explaining to lawmakers why a market basket reduction or hard cap on therapy services would be the wrong approach and harmful to patients.

Even before the bipartisan, bicameral agreement was announced, a number of providers, members of the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), visited Capitol Hill to make their case on this and other issues.

“As we approach the end of the year and an important time in forming the nation’s agenda, I want to be sure that the millions of Americans who depend on long-term and post-acute care are remembered—and—represented—in conversations on the Hill,” said Scott Allen, vice president of government relations for Health Care Navigator and board president of the Florida Health Care Association. “I am here to remind leadership that cuts have repercussions on individuals in my community, and that our profession has solutions that offer better alternatives than across-the-board reductions.”

During the meetings, providers asked lawmakers to:

  • Support a permanent SGR fix that does not result in market basket reduction and includes the therapy extension provision.
  • Use AHCA/NCAL’s hospital readmissions proposal as an offset rather than making arbitrary cuts.
  • Ensure observation stays count toward the required three-day stay, as provided by the Improving Access to Medicare Coverage Act of 2013.

Then, on November 11, AHCA outlined a framework addressing the Medicare manual medical review (MMR) process designed to address shortcomings and ensure continued access to necessary therapy services. As part of its Medicare Part B therapy cap exceptions process extension in 2012, Congress required a manual review component for claims processing to be implemented by the Centers for Medicare & Medicaid Services (CMS). AHCA said the hastily drawn procedures have resulted in a burdensome process for patients, regulators, contractors and healthcare providers alike.

Meanwhile, the National Association for the Support of Long Term Care (NASLis urging its members to ask lawmakers to support repeal of the therapy cap as part of the SGR reform legislation, or at least to extend the exceptions process. They also focused on the need to improve the therapy claims MMR process.

The message being delivered by NASL members includes the following:

  • Repeal the Medicare therapy cap as part of SGR reform and fix the MMR problem.
  • Since 1997, Congress has repeatedly addressed the SGR formula and therapy cap together through annual extensions. If Congress reforms SGR without repealing the therapy caps, it most likely will result in a hard cap on outpatient therapy services in 2014.
  • If Congress does not fix SGR and end the therapy cap, then it should extend the exceptions process for at least one year.
  • Co-sponsor the Medicare Access to Rehabilitation Services Act (H.R. 713/S. 367).

In a message on its website, NASL urges members: “Do not wait until December to contact your legislators. Email your legislators TODAY to preserve access to outpatient therapy! We encourage you to also engage your patients and their family members.” Sample letters are provided online for NASL members to use in contacting their lawmakers.