Health Information Management

Congress poised to finally fix the SGR

APCs Insider, March 27, 2015

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By Steven Andrews
Congress is closing in on a permanent fix to the Sustainable Growth Rate (SGR) formula, which has plagued the healthcare industry for more than a decade by threatening to lead to massive cuts to Medicare payments for physicians each year.
The government has continually passed patches to push the problem into the future, but those deadline-driven patch bills often served as a way to get otherwise controversial legislation approved, such as the ICD-10 delay last year.
On Thursday, the House overwhelmingly approved a bipartisan bill that would permanently fix the SGR formula, but the bill’s fate in the Senate is unclear, with Congress set for a two week recess beginning next week. Despite bipartisan support from leaders, some legislators have argued that fixing the SGR will cost too much. The bill would add about $200 billion to projected Medicare costs over the next 10 years by instituting 0.5% increases to physician reimbursement over the next five years.
If the Senate does not pass the SGR reform bill by March 31, physicians will face more than a 20% reduction in Medicare payments beginning April 1. Congress may be forced yet again to pass a patch that could push the problem anywhere from 30 days to another year into the future once again.
The specter of another hastily compiled patch bill raises the issue of surprises being inserted into the legislation. But it appears that support for another ICD-10 delay in Congress is dwindling. This week, Nelly Leon-Chisen, RHIA, director of coding and classification for AHA in Chicago said on a webinar that she doesn't expect another delay to occur at this point.
Providers should watch closely over the next week to see whether the Senate passes a permanent reform or what clauses Congress members insert into potential patch bills. The good news is major industry groups such as the AHA and AMA support permanent SGR reform. We'll find out if that's enough to finally fix the SGR over the next week.

Note: There will be no edition of the APCs Insider next week due to Good Friday. The next issue will be published Friday, April 10.


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