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Senate kicks SGR vote to April

March 27, 2015
by Lois A. Bowers, Senior Editor
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Healthcare professionals will need to wait until April 13 for any action related to the sustainable growth rate (SGR) formula. That’s when the Senate will reconvene after a two-week spring break that began today without members voting on a “doc fix” bill that permanently would repeal the formula via which physicians are reimbursed for care they provide to Medicare beneficiaries.

In a 392–37 vote yesterday, the House passed legislation that would replace the SGR formula with a 0.5 percent pay increase for physicians for each of the next five years while the healthcare system moves to reimbursement based on value instead of volume of services. The April 1 expiration of the current SGR patch could lead to a 21 percent cut in Medicare payments to physicians unless addressed by the legislature, but the Centers for Medicare & Medicaid Services (CMS) can delay the processing of claims if a solution appears imminent. (Editor’s addendum: See our April 1 article, CMS clarifies actions on expiring provisions, for information about how reimbursement will be affected until the Senate vote.) Senate Majority Leader Mitch McConnell told Reuters that he is confident that the body will approve the bill once they return from the break, and President Barack Obama has said that if the legislation makes its way to his desk, he will sign it.

The American Health Care Association (AHCA) previously said it supports the bill as a way to end the annual battles to see which sector of healthcare will take a big hit. Today, AHCA President and CEO Mark Parkinson said in a statement: “Although we wanted the doc fix finalized by April 1, we remain optimistic about the passage of this important and historic legislation when the Senate returns from recess. We are proud of the bipartisan effort that successfully pushed H.R. 2 through the House, and we congratulate Congress for getting it this far. There is a clear mandate for this legislation. We call for quick passage of this permanent solution when the Senate returns.”

LeadingAge previously expressed concerns that the legislation will not fully repeal the caps on Medicare coverage of outpatient therapy that were part of a 1997 attempt to curtail the growth in Medicare spending. The organization, however, ultimately encouraged its members to contact their senators in support of the House resolution.

The one percent payment update in 2018 for post-acute care providers may turn out to be somewhat smaller than the market basket increase the Centers for Medicare & Medicaid Services might have computed and our payments still will be subject to sequestration, [but] this is a one-time, one-year provision, not the ongoing, cumulative and larger payment reductions we had anticipated, LeadingAge wrote to its members. Considering the reimbursement cuts with which we previously were threatened, we consider this provision to be good news for our sector.

March 25, the Congressional Budget Office (CBO) estimated that enacting H.R. 2, the bill passed by the Senate, would cost $0.9 billion less over the 2015–2025 period than freezing payment rates for physicians’ services. The bill would increase direct spending by about $145 billion and revenues by about $4 billion, resulting in a $141 billion increase in federal budget deficits. The legislation, however, would waive the pay-as-you-go procedures that otherwise apply, the CBO said.

After 2025, the budgetary effects of the legislation could result in net savings or net costs. Part B premiums would increase by about $10 in 2025 under the bill, CBO says, compared with $7.50 if Medicare's payment rates for physicians’ services were frozen at current levels.

The AARP said it supports a permanent solution to the SGR and the bill’s efforts to “enhance value in Medicare” but remains concerned “that Medicare beneficiaries are unfairly shouldering more than their fair share of the cost of the SGR ‘doc fix’ ” via increased premiums and reduced coverage through some Medigap insurance plans. The organization urged the Senate to improve the bill passed by the House.

Related coverage:

U.S. House passes doc-fix bill that would repeal SGR

AHCA gives 'enthusiastic support' to SGR bill

Concerns remain after introduction of SGR replacement bill