Six- to Nine-Month SGR Patch Likely as Deadline Looms

With a March 31 deadline approaching, congressional committees continue to meet and discuss how to fix the Medicare Sustainable Growth Rate (“SGR”) physician payment formula. However, health care industry lobbyists now agree that a six-to nine-month “patch” of the existing formula is more likely than lawmakers reaching a deal on a permanent replacement. If Congress fails to act before the end of March, Medicare physicians face a drop in reimbursement of approximately 20%.  As has been the case for over a year, determining how to pay for a permanent SGR replacement is the biggest obstacle for lawmakers. Republicans are pushing for cuts from entitlement programs or the Affordable Care Act while Democrats prefer cuts to health care providers.

Congress Hears on ICD-10 Billing System

On Wednesday, February 11, the House Energy and Commerce Health Subcommittee held a hearing to assess the health care community’s readiness to complete the transition to ICD-10.  Subcommittee Chairman Joe Pitts (R-PA) indicated his support for moving forward and called for no further delays with the implementation of a new medical billing system, which is scheduled to change over on October 1, 2015.  The hearing followed a February 6 GAO report that said CMS has adequately prepared for the transition.

The compliance date for ICD-10 has been delayed twice in recent years.  Most recently, implementation was pushed back in the SGR patch (P.L. 113-93) to October 1, a year after it had been scheduled to go into effect.  Last week, CMS said in their annual budget proposal that the agency is on track to implement ICD-10 by the 2015 deadline.

Medicare Announces New Payment Model for Cancer Care

On Friday, February 13, CMS announced a new cancer care initiative for physician practices aimed at improving and coordinating care at lower cost.  According to CMS, the five-year model begins in 2016 and will provide episode- and performance-based payment.

The initiative comes after HHS Secretary Burwell announced last month that CMS wants to link 30% of traditional, fee-for-service Medicare payments to quality or value through alternative payment models, such as accountable care organizations or bundled payment arrangements, by the end of 2016.

HRSA Announces Rural Health Grants to Support Chronic Care Coordination

Recently, the Health Resources and Services Administration (“HRSA”) announced that rural health networks can apply through April 6, 2015 for a portion of $1.6 million in funding to support care coordination strategies to improve outcomes for patients with heart failure, chronic obstructive pulmonary disease and diabetes.  The HRSA program will award up to $200,000 per year for three years to rural health networks consisting of least three health provider organizations.

Bills Introduced This Week

Rep. Pete Sessions (R-TX) introduced legislation (H.R. 822) that would require reporting of certain data by providers and suppliers of air ambulance services for the purpose of updating reimbursements under Medicare. The bill would also require HHS to create and implement a system for air medical Medicare providers to report their cost on specific cost drivers.

Rep. Lloyd Doggett (D-TX) introduced a bill (H.R. 876) that would require hospitals to provide certain notifications to individuals classified by such hospitals under observation status rather than admitted as inpatients of such hospitals.

Rep. Diane Black (R-TN) introduced a bill (H.R. 887) that would amend Title XVIII of the Social Security Act with respect to the treatment of patient encounters in ambulatory surgical centers in determining meaningful EHR use.

Rep. Jan Schakowsky (D-IL) introduced a bill (H.R. 952) to amend Titles XVIII and XIX of the Social Security Act to establish a minimum direct care registered nurse staffing requirement at nursing facilities and skilled nursing facilities under Medicare and Medicaid.

Next Week in Congress

The House and Senate will be out of session for the first time in 2015. Both will reconvene the week of February 23.