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Mar 24, 2014

SGR Bills Aplenty, But Doc Fix Extension Seems Imminent

Published

Mar 24, 2014

The bipartisan, bicameral legislative framework for a repeal of the Sustainable Growth Rate (SGR) formula and shifts toward quality/value-based payment and adoption of alternative payment models for physicians has been primed since early February.

As expected, the focus of Congress has shifted toward how to pay for the costs of the legislation. Over the past few weeks, a number of bills have been introduced into both the House and Senate that included various ways to pay for the legislation. However, none of the payment offset proposals have wide-ranging support and it is highly likely that we will see another short-term SGR patch to extend past the current doc fix, set to expire on March 31.

Four total bills, two in each the House and Senate, have recently been either introduced or passed; all with the same base legislation agreed upon in February, but with distinct differences in how to pay for the legislation. The House bills include only the legislation agreed upon, while the Senate bills include Medicare extenders that were included in previous Senate Finance Committee SGR discussions. These include the extension of the physician work geographic practice cost index (GPCIs) floor, funding for the development of adult and pediatric quality measures and a repeal of the therapy cap.

HOUSE

H.R.4209: SGR Repeal and Medicare Provider Payment Modernization Act of 2014

H.R.4209: SGR Repeal and Medicare Provider Payment Modernization Act of 2014

  • Paid for by capping the Overseas Contingency Operations (OCO) funding. H.R.4015: SGR Repeal and Medicare Provider Payment Modernization Act of 2014 SENATE

  • Does not include Medicare extenders.
  • Referred to Committee on March 12, lacks support from House Republicans.
  • Paid for with a five-year delay (until Jan. 1, 2019) of the Affordable Care Act’s (ACA) individual mandate.
  • Does not include Medicare extenders.
  • Passed House on March 14.
  • The White House released a statement that the president would veto the legislation.
  • Scored at $138 billion cost over 10.75 years (Apr. 2014-2024).

S.2122: Responsible Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014

S.2122: Responsible Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014

  • Paid for by permanently repealing the ACA’s individual mandate. S.2110: Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014

  • Includes Medicare  extenders.

S.2110: Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014

  • The bill does not include any pay-fors. While there is wide support for the legislation from the stakeholder community, the competing efforts to pay for the legislation are a sign that the negotiation process has broken down. Physician, provider and other stakeholder groups will continue to press Congress on passing SGR legislation in 2014, but with midterm elections approaching the efforts may lose steam if nothing is passed within the next few weeks. Existing quality and value programs, such as the Physician Quality Reporting System (PQRS) and the Value-Based Payment Modifier (VBPM) will continue in their current path for the foreseeable future. Life sciences companies should continue to operate under the assumption that these programs are active and plan/prepare accordingly to ensure that products are demonstrating appropriate value to the healthcare system.

  • Includes Medicare  extenders .
  • Will likely be placed on the Senate calendar for the last week of March.
  • Scored at $180 billion cost over 10.75 years (Apr. 2014-2024).

Without a deal in sight, we will likely see another SGR fix passed by Congress in the immediate near-term given the looming March 31 end of the current fix. The House Ways and Means Committee is planning another short-term SGR fix. The length of this patch is yet to be determined, but it is expected to be for at least the remainder of 2014, keeping the 0.5 percent update in place. How this extension will be paid for also is up in the air, but hospital and long-term care provider and laboratory payments have been targets in the past.

Congress will continue to discuss these pieces of legislation and potential cost offsets, with a SGR patch extension likely to pass in late March/early April. If the current patch expires without an extension, expect CMS to hold claims until Congress passes legislation.

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