House Passes SGR Patch; Senate to Vote Next

With April 1 less than a week away, any hopes of passing legislation that would permanently repeal and replace the Sustainable Growth Rate (SGR) are fading. Instead of permanently doing away with the flawed formula, it looks like another temporary patch will be enacted in order to avoid a 24 percent cut to Medicare payment that is set to go into effect on April 1. 

Today, the House passed the Protecting Access to Medicare Act of 2014 (H.R. 4302) by voice vote. The Senate is expected to vote on the legislation in the coming days.

While the legislation includes provisions the ACC has advocated for within the scope of full SGR repeal, failure to permanently repeal the SGR given the significant bipartisan/bicameral legislative efforts this year represents a wasted opportunity to finally provide much needed stability within Medicare.

Key provisions in the legislation include:

  • Prevents 24 percent cut scheduled for April 1, 2014; provides a .5 percent update through Dec. 31, 2014, and a 0 percent update from Jan. 1-March 31, 2015
  • Requires consultation with appropriate use criteria (AUC) and clinical decision support for advanced diagnostic imaging
    • AUC must be developed or endorsed by professional medical societies
    • Clinical decision support software must be available to providers at no cost
    • Beginning in 2017, claims that fall under the AUC requirement will only be paid if they include data that indicate clinical decision support tools were consulted
    • Hardship exemptions are available (rural areas or insufficient internet access)
    • Beginning in 2020, the HHS Secretary will identify outlier providers based on data from two previous years
    • Outliers would be subject to prior authorization – no more than 5 percent of total providers
  • Allows the Health and Human Services (HHS) Secretary to revise payments for potentially misvalued codes within the physician fee schedule based on information collected from providers
    • Policy applies to fee schedule for years 2017-2020
    • Target for value reduction is .5 percent of the estimated amount of total fee schedule expenditures for the given year
    • If the total relative value unit for an identified misvalued code is scheduled to be reduced by 20 percent or greater due to the reevaluation, the adjustment must be phased in over two years
  • Extends HHS Secretary's medical review activities regarding the "Two Midnight Rule" for the first six months of 2015
  • Delays the transition to ICD-10 for one year
  • Extends funding for the National Quality Forum for measure endorsement through July 2015
  • Beginning January 2016, requires all CT services to be provided by equipment adhering to NEMA dose standards
    • Applies to fee schedule and Hospital Outpatient Prospective Payment System services
    • Payment for services rendered with equipment not consistent with the above standards would be reduced 5 percent in 2016 and 15 percent in 2017 and subsequent years
  • Consolidates the 2 percent Medicare sequester cut scheduled for full year 2024 into a 4 percent cut in the first six months of 2024

Stay tuned for updates and the situation unfolds.

Keywords: Societies, Medical, Medical Secretaries, Referral and Consultation, Health Expenditures, Medicare, Prospective Payment System

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