Rumors Swirl as Deadline for SGR Deal Nears

With the Sustainable Growth Rate (“SGR”) “patch” set to expire on March 31, 2015, House Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA) have been discussing a possible deal on a permanent repeal and replacement of the physician payment formula.  Earlier in the week, it appeared likely that Congress would pass a temporary extension to avert physician cuts that would take effect on April 1.  But substantive proposals have been drafted in the House to pass a permanent repeal of the SGR that would either partially offset the $170 billion price tag or provide no offset at all.

As in the past, the major obstacle to a permanent SGR solution is money.  Last year, lawmakers agreed on a bipartisan, bicameral plan for permanent repeal, but the proposal collapsed because there was no agreement on how to pay for the measure.  In the House, most Republicans continue to demand that the cost of permanent repeal be completely offset and not add to the federal deficit.  Therefore, even a partially paid for SGR repeal would force House Speaker Boehner to rely on Democratic support to achieve a majority.

If an SGR repeal and replacement bill is to be paid for at all, or if Congress passes another patch, lawmakers could focus on cuts to providers to cover the cost.  Reports indicate these cuts include: extending the Medicare sequester; rebasing payments for disproportionate share hospitals for another year; changing post-acute care inflationary updates; and creating site neutral payments for some providers on certain patients and procedures.

If the House passes a permanent doc fix, the Senate would most likely support any House passed measure, even with potential Republican defections.  The situation is fluid, however, and it remains likely that Congress will once again end up with some version of a short-term patch beyond June when the Supreme Court is expected to rule on the King v. Burwell case.  If ACA subsidies are struck down, the SGR could potentially become part of a broader discussion about fixes to the ACA.

Senate Bill Addresses Readmissions Disparity

On Tuesday, March 10, Sen. Joe Manchin (D-WV) and Sen. Rob Portman (R-OH) introduced a bill to adjust the ACA’s Hospital Readmission Reduction Program.  The bill (S. 688) would require CMS to account for a patient’s socioeconomic status when calculating the risk-adjusted readmission penalties at hospitals under the ACA.  The legislation is intended to help hospitals with low-income populations, which generally have higher readmission rates.

The Hospital Readmission Reduction Program reduces payments to hospitals with excess readmissions during the prior three years. In 2014, penalties were capped at two percent of a hospital’s inpatient base operating payments. The cap increased to three percent in 2015.  A companion bill (H.R. 1343) was introduced in the House by Rep. Jim Renacci (R-OH).

Senate Bill Would Expand Use of Medicare Claims Data

On Monday, March 9, Sens. Tammy Baldwin (D-WI) and John Thune (R-SD) reintroduced a bill that would expand the use of Medicare data under CMS’s Qualified Entity Program, which allows organizations to access and analyze Medicare claims data for select purposes.  The bill (S. 679) would allow organizations to analyze Medicare data and redistribute it to authorized users such as health plans and providers.

House Ways and Means Chairman Paul Ryan (R-WI) backed similar legislation last Congress.  The language was included in last year’s SGR replacement, which never came to a vote in the Senate after passing the House.

Bills Introduced This Week

Rep. Greg Walden (R-OR) introduced a bill to amend Title XVIII of the Social Security Act to help ensure more timely access to home health services for Medicare beneficiaries.

Rep. Karen Bass (D-CA) introduced a bill (H.R. 1345) that would extend to physician assistants’ eligibility for Medicaid incentive payments for the adoption and use of electronic health records, whether or not such physician assistants practice at a rural health center or federally qualified health center.

Next Week in Washington

The House returns to Washington on Monday, and negotiations over SGR legislation will continue. The House also plans to vote on a number of noncontroversial health-related bills, including the Trauma Systems and Regionalization of Emergency Care Reauthorization Act (H.R. 648) and the Electronic Health Fairness Act (H.R. 887).

The House Majority Leader’s office also announced that the body will vote on establishing the fiscal year 2016 budget and legislation related to the expiration of Medicare physician payments before the end of March.  The Senate plans to vote on its budget resolution prior to the Easter break as well.