Dreams of permanent pay fix fade as House passes one-year SGR fix; ICD-10 also faces potential delay

Leaders on Capitol Hill spent so much time debating, discussing and even reaching a tentative deal on a permanent repeal to the Sustainable Growth Rate (SGR) formula that has caused so much payment uncertainty for physician practices that people started to think it would actually happen.

It looks like those thoughts were premature, as a breakdown in discussion has led to yet another temporary, one-year freeze to physician payment rates that would take effect on April 1, 2014 and extend through March 31, 2015.

The one-year extension passed the House of Representatives on a voice vote on March 26, and is awaiting action in the Senate. The current, temporary payment fix, which ironically was supposed to provide extra time for a permanent fix, is set to expire March 31, 2014. With no action, physician payments would drop by more than 20%.

In addition to the payment fix, the bill also imposes a one-year delay on ICD-10-CM diagnosis code implementation by preventing CMS from recognizing it prior to Oct. 1, 2015.

While there are no guarantees until the Senate passes the bill and it is signed by the President, the House passed it on a voice vote and there are indications that House and Senate leaders have agreed to the legislation.

Most physician specialty groups oppose the bill, despite the one-year ICD-10 delay, because of the lack of a permanent payment fix.

In addition to the SGR fix and ICD-10 delay, the bill would continue to give temporary extensions to the 1.0 minimum work GPCI floor and the therapy cap exceptions process that enables providers to get fairly liberal exemptions beyond the therapy limits.

Some other interesting provisions in the legislation:

• Deduction limits on employer sponsored health plans would be eliminated.
• Private sector lab payments would be reported to CMS starting in 2016 and used to calculate Medicare’s lab payments. The labs would report the data, which would be used to set a weighted median payment for Medicare.
• Payments would be reduced for the technical component of imaging tests done not using imaging equipment up to standard, a change designed to promote quality that would be effective in 2016. Reductions would be 5 percent in 2016 and 15 percent in 2017 and beyond.
• CMS would be authorized to collect the inputs used to set relative value units from any reliable source and use the information to help set the values. Information could come from provider surveys and electronic health records, among other places. CMS is authorized to pay for the information.