by Wyn Staheli, Director of Research
March 27th, 2015
It appears that the repeal of the Sustainable Growth Rate formula (SGR) could finally be a real possibility. On Thursday, March 26, The U.S. House of Representatives overwhelmingly passed H.R 2, The Medicare Access and CHIP Reauthorization Act which includes both repeal and replace the flawed SGR formula that has caused a great deal of disruption to the Medicare payment system over the last several years. H.R. 2 includes the following provisions:
- Replacing the SGR with a 0.5% increase in Medicare physician reimbursement commencing on July 2015 and continuing through December 2015, and then annual 0.5% increases up through 2019.
- Extend the Children's Health Insurance Program (CHIP) 2 years (not the 4 years that some in the Senate want)
- Extend funding for community health centers and the National Health Service Corps
- "consolidate various reporting programs, such as the Meaningful Use program for electronic health records and several quality reporting programs, into a new merit-based incentive payment system and would incentivize physicians to participate in alternative payment models such as accountable care organizations (ACOs)" according to MedPay today.
President Obama has expressed his support for H.R. 2, so it is now up to the Senate which is currently scheduled to begin a two-week recess beginning next week. Some Senate leaders have expressed cost and other concerns regarding H.R. 2. Therefore, it seems unlikely that the bill will pass before the scheduled 21% rate cut in Medicare provider reimbursements will take effect on April 1.
In anticipation of possible changes and the scheduled pay cut looming, the Centers for Medicare & Medicaid Services (CMS) stated in its March 24th Provider eNews that “[u]nder current law, electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt. CMS will notify [providers] on or before April 11, 2015, with more information about the status of Congressional action to avert the negative update and next steps.”