Practice Economics

Senate passes 1-year SGR patch; delays ICD-10 until 2015


In a last-minute move, Congress averted a scheduled 24% cut to Medicare physician fees slated to start on April 1, while simultaneously delaying the move to the ICD-10 coding sets.

On March 31, the Senate voted 64 to 35 to approve H.R. 4302, a bill that replaces the scheduled cut called for by the Medicare Sustainable Growth Rate formula with a 0.5% fee increase through the end of 2014 and a pay freeze from Jan. 1, 2015 through March 15, 2015. The bill also bars the Health and Human Services (HHS) department from implementing ICD-10 until Oct. 1, 2015.

Alicia Ault/Frontline Medical News

Congress sidestepped a 24% cut to Medicare physician fees slated to begin April 1.

The House passed the same legislation on March 27. It now heads to the White House for President Obama’s signature.

At first glance, the bill looks like good news for physicians, who will get relief from both a hefty Medicare fee cut and a costly new regulatory requirement. But many physician organizations, led by the American Medical Association, have campaigned against the temporary patch, saying that it essentially stops the work to permanently repeal the SGR.

"It appears that an unprecedented, bipartisan agreement on Medicare reform is on the verge of being cast aside because elected leaders are unwilling to make tough choices to strengthen programs serving 50 million Americans," the AMA and more than 50 other medical societies wrote to congressional leaders before the House vote.

Several physician groups had endorsed a bipartisan legislative package that would have eliminated the SGR and replaced it with a combination of small fee increases and delivery system reforms. The hurdle to passing the legislation was finding a way to pay for it that would appeal to both Democrats and Republicans.

Recently, the House passed H.R. 4015, which would have funded the permanent SGR repeal package with a 5-year delay of the Affordable Care Act’s individual insurance mandate. But that bill is unlikely to be considered in the Democratic-controlled Senate. And an attempt by Sen. Ron Wyden (D.-Ore.) to move the permanent SGR repeal forward and pay for it using the savings from the end of the wars in Iraq and Afghanistan failed to gain enough votes in the Senate.

Before the March 31 vote, Sen. Wyden chided fellow lawmakers for continuing to pass temporary fixes to the SGR problem rather than replacing it and moving to a payment system that incentivizes quality improvement. "It can’t be ducked much longer," he said.

But Sen. Orrin Hatch (R.-Utah), who worked on the bipartisan bill to replace the SGR, said he objects to the funding mechanism that Sen. Wyden proposed. He said the 12-month SGR patch will give lawmakers more time to agree on how to pay for a permanent fix. "I’m not going to make the perfect the enemy of the good," he said on the Senate floor.

On Twitter @maryellenny

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