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Sustainable Growth Rate

Congress Stops 24 Percent Medicare Pay Cut with Problematic Short-Term SGR Fix

Temporary Solution Includes 1-Year ICD-10 Delay

The U.S. Senate passed legislation (H.R. 4302) to delay for one year the 24 percent Medicare physician pay cut on the eve of its implementation, scheduled for April 1. The Academy and a broad coalition of medical associations took the bold step of opposing the short-term solution. They contend it seriously jeopardizes passage of bipartisan, bicameral legislation to finally permanently repeal the faulty sustainable growth rate formula and make other program reforms. The SGR is used to calculate Medicare physician pay.

H.R. 4302 uses cost-saving proposals included in the permanent SGR-repeal legislation. The medical coalition believes raiding the repeal plan to fund a short-term fix will make it harder for Congress to pay for a permanent solution. Specifically, H.R. 4302 requires the Centers for Medicare and Medicaid Services to cut $4 billion starting in 2017. CMS will do this by identifying and revaluing “potentially misvalued” codes. The Academy contends the arbitrary savings target will compromise patients’ access to care. CMS has already moved $2.5 billion in payments from major specialty and surgical codes. Past payment changes dramatically cut payments for OCT, cataract and intravitreal injections. Regardless of past cuts, review of all codes as “potentially misvalued” is possible.

Because of Congress’ work to stop the Medicare pay cut, CMS announced last week it will hold claims for 10 days. Physicians should not see a reduction in their claims payments. H.R. 4302 preserves the 0.5 percent payment update that took effect Jan. 1 through Dec. 31. Physicians will receive a 0 percent update Jan. 1-March 31, 2015.

Congress Delays ICD-10 Implementation
In addition to stopping the SGR cut, Congress delayed ICD-10 implementation one year, to Oct. 1, 2015. The Academy believes lawmakers did this to gain physicians’ support. Presumably lawmakers thought the delay would offset physicians’ anger at their failure to permanently fix the SGR and the imposition of new cuts on payments.

The Academy continues to urge lawmakers to renew the spirit of bipartisanship and pass permanent SGR-repeal legislation during this Congress.