President Signs SGR ‘Patch’ Bill, ICD-10 Delayed

President Obama has signed a bill that requiring the federal government to delay the adoption of ICD-10-CM/PCS for at least one year.

The bill, H.R. 4302, Protecting Access to Medicare Act of 2014, mainly creates a temporary “patch” to the Medicare sustainable growth rate (SGR), postponing the 24% physician fee schedule cut slated to take effect on April 1, 2014.

In addition to the temporary fix to the SGR problem, legislation also made a number of other changes that will have long-lasting implications, including implementation of ICD-10.  The bill prohibits the Secretary of HHS from mandating use of ICD-10 until October 1, 2015.

Clinic Service and industry groups are pleased that physicians will not be subject to a dramatic cut in Medicare payments however we are very concerned that this is not a long-term solution to physician payment issues. For this reason, many physician groups, including nearly 90 state and national medical societies, have come out against the bill.

The legislation also affects other changes. The Healthcare Billing and Management Association released a list of those changes which is described below.

Clinic Service will continue to monitor Congressional developments and communicate the latest information as soon as possible so you have the most up-to-date information.

Summary/Highlights of SGR Patch Legislation

Protecting Access to Medicare Act of 2014

·         “Doc Fix”: Prevents the 24% cut in reimbursement to doctors who treat Medicare patients on April 1, 2014 and replaces it with a 0.5% (through December 31, 2014) and a 0% update from January 1 until April 1, 2015. 

·         Extends Medicare work Geographic Practice Cost Index (GPCI) floor for 1 year

·         Extends Medicare therapy cap exception process for 1 year ·

·         Extends Medicare ambulance add-on payments for 1 year

·         Extends Medicare adjustment for Low-Volume hospitals for 1 year

·         Extends Medicare-dependent Hospital (MDH) program for 1 year

·         Extends Medicare Advantage Special Needs Plan for 1 year

·         Extends Medicare Reasonable Cost Contracts for 1 year

·         Extends funding for National Quality Forum (NQF) through the first 6 months of fiscal year 2015

·         Extends funding outreach and assistance for certain low-income programs for 1 year

·         Extends Two-Midnight Rule Auditing program for Hospitals for 6 months

·         Technical Changes to Long-Term Care Hospitals

·         Extends Qualifying Individual (QI) Program for 1 year

·         Extends Transitional Medical Assistance (TMA) for 1 year 

·         Extends Medicaid and CHIP Express Lane Option for 1 year

·         Extends the Special Diabetes Program through fiscal year 2015

·         Extends Abstinence Education through fiscal year 2015

·         Extends the Personal Responsibility Education Program (PREP) through fiscal year 2015

·         Extends Family-to-Family Health Information Centers through fiscal year 2015 

·         Extends the Health Workforce Demo for Low-Income Individuals for 1 year

·         Extend funding for the Maternal, Infant, & Early Child Home Visiting for 6 months

·         Extends funding for the development of pediatric quality measures

·         Delays for 2 years the enactment of the Medicaid Third Party Liability Settlements

·         Delays the transition to ICD-10 under the Medicare program for 1 year.  

·         Repeals the ACA’s limitation on deductibles for small group health plans

·         Requires a GAO report on Children’s Hospital GME Program implementation

Demonstration Programs to Improve Community Mental Health Services:
Demonstration grants to implement Assisted Outpatient Treatment Grant Program for individuals with mental illness    

Skilled Nursing Facility (SNF) Value-Based Purchasing Program (VBP):
Establishes a Skilled Nursing Facility Value-Based Purchasing program based off of individual SNF performance on a hospital readmission measure.  

Medicare Lab Fee Schedule Reform:
Adopts market-based private sector payment rates for lab services.   

Medicare End Stage Renal Disease (ESRD) Prospective Payment System Revisions:
Prohibits the inclusion of the payment for the oral-only drugs that beneficiaries take related to their ESRD in the Medicare per-dialysis treatment bundled payment rate through 2024.  It spreads out the payment reduction required by the American Taxpayer Relief Act of 2012 to adjust for the reduced use of intravenous or injectable drugs that are paid through the bundle. 

Quality Incentives for Diagnostic Imaging & Evidence-Based Care:
Establishes CT equipment radiation dose standards for purposes of payment under the Medicare program in order to protect the health and welfare of beneficiaries.  Sets into place appropriate use criteria for imaging services paid to medical.   

Transitional Fund for SGR Reform:
Uses the $2.3 billion set aside for SGR in the Bipartisan Budget Act of 2013. 

Ensuring Accurate Values for Physician Fee Schedule Services:
Allows the Secretary of Health and Human Services to use information received from medical providers and other sources to adjust code pricing to address misvalued codes used under the Medicare Physician Fee Schedule. 

Medicaid Disproportionate Share Hospital (DSH) Relief and Rebase:
Delays reductions in payments to Disproportionate Share Hospitals by 1 year and then makes additional reductions through 2024. 

Medicare Sequester Realignment:
Realigns the Medicare sequester in 2024 without increasing the overall effect of the sequester on Medicare providers.