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SGR Repeal Passes

April 16, 2015

On April 14, 2015, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed the Senate by an overwhelming vote of 92-8. Although President Obama has not officially signed the bill into law, weeks ago he indicated his full support when H.R. 2 passed the House of Representatives.

For over a decade, the SGR formula has created headaches for healthcare providers seeking reimbursement for services rendered to Medicare beneficiaries. Reimbursement rates have fluctuated wildly and last minute legislative 'fixes' were only short-term bandaids for a flawed system.

Medicare rates have been frozen at the March levels up until June, and then will rise by 0.5% for the remainder of the year. After that, they will continue to increase 0.5% each year from 2016 through 2019. Additionally, the MACRA will shift the current Medicare compensation from a fee-for-service model to a pay-for-performance. This will inevitably require Medicare providers to fully embrace electronic health records and understand the PQRS process.

Medicare issued the following statement on April 15th:

On April 14 , 2015, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015; the President is expected to sign it shortly. This law eliminates the negative update of 21% scheduled to take effect as of April 1, 2015, for the Medicare Physician Fee Schedule. In addition, provisions allowing for exceptions to the therapy cap, add-on payments for ambulance services, payments for low volume hospitals, and payments for Medicare dependent hospitals that expired on April 1 have been extended. CMS will immediately begin work to implement these provisions.

In an effort to minimize financial effects on providers, CMS previously instituted a 10-business day processing hold for all impacted claims with dates of service April 1, 2015, and later. While the Medicare Administrative Contractors (MACs) have been instructed to implement the rates in the legislation, a small volume of claims will be processed at the reduced rate based on the negative update amount. The MACs will automatically reprocess claims paid at the reduced rate with the new payment rate.

No action is necessary from providers who have already submitted claims for the impacted dates of service. 

Click here to read an in-depth article about this important piece of legislation.


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