Posted by J. Nicole Martin
on April 15, 2015
We wrote in late March about the U.S. House of Representatives passing SGR legislation intended to be a permanent cure to Medicare’s “doc fix” legislation. Yesterday evening, the Senate finally passed the SGR legislation to avoid a rate cut. Congress anticipates President Obama will sign the SGR legislation into law fairly quickly. Among other measures, the SGR legislation will amend Title XVIII of the Social Security Act, pertaining to Medicare, to:
- “remove sustainable growth rate (SGR) methodology from the determination of annual conversion factors in the formula for payment for physicians’ services; and
- revise the update in rates for 2015 and subsequent years.”
Notably, the SGR legislation extends the two-midnight Medicare rule through FY2015. The two-midnight Medicare rule only provides coverage for hospital stays when a beneficiary remains in a hospital over two midnights because the beneficiary requires care over this minimum period of time. Medicare generally denies coverage for care provided during shorter length hospital stays. The SGR legislation also extends the CHIP program through FY2017.
For further information contact Cozen O’Connor’s health care team.
Posted by Ryan Blaney
on March 27, 2015
Affordable Care Act
In a historic bipartisan moment, the U.S. House of Representatives passed a nearly 300-page bill that is intended to “repeal the Medicare sustainable growth rate [“SGR”] and strengthen Medicare access by improving physician payments and making other improvements.” The legislation, titled the Medicare Access and CHIP Reauthorization Act of 2015, which is referred to as the Medicare “doc fix”, is the result of ongoing bipartisan efforts to resolve an unpopular physician reimbursement system that if not overridden each year would cut Medicare doctor’s pay by a notable percentage. The annual reimbursement cut would occur as required under the federal Balanced Budget Act of 1997 (the “BBA”), if not for the annual fixes set into motion by Congress. In a March 25, 2015 letter from the Congressional Budget Office (“CBO”) to House Speaker Boehner, the CBO explained that the BBA established the SGR formula “to ensure that real—that is, adjusted for inflation—spending per [Medicare] beneficiary for physicians’ services would grow on average at a rate of increase in gross domestic protect per capita minus the expected rate of increase in productivity for the economy as a whole.”
According to news outlets and press conferences, President Obama is ready to sign the bill once the Senate passes it. In the CBO’s letter to House Speaker Boehner, it estimated that this bill will increase:
- The federal budget deficits by $141 billion;
- Direct spending by approximately $145 billon; and
- Revenues by approximately $4 billion.
Under the Bill, Medicare’s payment rates for services on the physician fee schedule would increase by 0.5 percent a year for services furnished through 2019. From 2019 through 2025 payments will remain the same but Medicare doctors will be eligible for merit-based bonus payments consistent with Medicare initiatives such as care models that shift away from fee for services.
Many expected the Bill to pass the Senate on Friday, March 27th but the Bill was not put up for a vote and Senate Minority Leader Harry Reid and Majority Leader Mitch McConnell said the bill will not get a vote until mid-April when the Senate returns from its recess. CMS has provided notice that they will be able to hold payment for 14 calendar days to avoid a rate cut.
For further information contact Cozen O’Connor’s health care team. We will continue to monitor and provide updates.