ICD-10 Delayed, SGR Patched for at Least 1 Year

As medical practices planned for International  Classification of Diseases (ICD)-10 and the implementation of new diagnostic codes  on October 1, 2014, practice administrators took steps to ensure that physicians and staff would be prepared. With the clock ticking down, staff had been signing up for training seminars, bringing experts onsite, and allowing extra coding time in the schedule, all to be sure that new codes would be entered accurately into patient claims beginning October 1.

However, with a congressional vote in late March on bill H.R. 4302, Protecting Access to Medicare Act of 2014,1 and a sweep of the presidential pen, implementation of the new codes has been delayed for at least 1 year, caught up in legislation that also delayed cuts to physician reimbursements through Medicare’s sustainable growth rate (SGR) payment formula. While the legislative action avoided a nearly 24% reduction in physician payments through the SGR formula, many physician groups opposed this “patch,” instead favoring a reform of the Medicare reimbursement system.2 Since its deployment, 16 short-term annual fixes have been made to SGR to prevent payment cuts.3

 “In the face of broad opposition from medical organizations against simply defaulting to another short-term patch, the House relied on procedural maneuvering to quickly approve the 12-month proposal on a voice vote. The Senate followed suit…. Both chambers failed to seize a historic opportunity,” Ardis Dee Hoven, MD, President of the American Medical Association (AMA), said in a statement. “While we are disappointed that the fight for SGR repeal must continue, we are in a far better place to advance reform than we were a year ago. Rest assured that the AMA will continue to press for the changes we need to ensure our practices are sustainable and our patients have reliable access to the care they need.”4

Earlier this year, a bipartisan group of House and Senate lawmakers proposed the SGR Repeal and Medicare Provider Payment Modernization Act,5 which intended to permanently repeal Medicare’s SGR formula for physician payments and replace it with annual increases of 0.5% between 2014 and 2018. These increases would be maintained through 2023 so that physicians have time to receive additional payments through a merit-based incentive payment system. The proposed act would apply to clinical nurse specialists, nurse practitioners, and physicians of medicine or osteopathy. A summary of the legislation suggests that the new payment system would encourage care coordination initiatives for patients with chronic illnesses. It would also require electronic health records to be interoperable by 2017.

In addition to the temporary SGR patch, the bill also extends the geographic practice cost index floor through April 1, 2015, the therapy cap exceptions process through March 15, 2015, and increased inpatient hospital payment adjustment for certain low-volume hospitals  starting on April 1, 2015, for FY2016 and subsequent tax years.1 The bill also extends the Medicare-dependent hospital program through March 31, 2015, and extends authority to renew a reasonable cost-reimbursement contract with a health maintenance organization and competitive medical plan through December 31, 2016.

In addition, the bill amends the Medicare Improvements for Patients and Providers Act of 2008, to extend through March 31, 2015, the funding of various programs, including agencies on aging and the contract with the National Center for Benefits Outreach and Enrollment. It also authorizes the Secretary of Health & Human Services to continue through June 2015, with a specified limitation, certain medical review activities related to the 2 Midnight Rule. The latter is a controversial rule that allows Medicare coverage of only hospital stays for which a physician admits to a hospital a beneficiary expected to require care that crosses 2 midnights, but generally denies coverage of care expected to require less than a 2 midnight stay.

The full list of amendments can be found on Congress.gov.

What the Bill Means for You
This extension, which the Con­gressional Budget Office estimates will add as much as $180 billion to the federal deficit,6 has left both lawmakers and healthcare professionals alike with many unanswered questions.7 In particular, the Cen­ters for Medicare & Medicaid Services wonders whether October 1, 2015, will become the new deadline; whether the agency will allow organizations that are ready to implement ICD-10 to do so voluntarily; and whether the agency will scrap ICD-10 altogether, and instead wait for ICD-11, which is due to be released in 2017.

References

  1. Congress.gov. H.R. 4302 – Protecting Access to Medicare Act of 2014. http://beta.congress.gov/bill/113th-congress/house-bill/4302. Accessed April 9, 2014.
  2. Pittman D. SGR, ICD-10 Delay Ready to Be Signed Into Law. MedPage Today. http://www.medpagetoday.com/PublicHealthPolicy/Medicare/45043. Published March 31, 2014. Accessed April 14, 2014.
  3. MacDonald I. Senate Oks SRG patch, delays ICD-10. Fierce Healthcare. http://www.fiercehealthcare.com/story/senate-oks-sgr-patch-delays-icd-10/2014-03-31. Published March 31, 2014. Accessed April 10, 2014.
  4. AMA Wire. Why permanent SGR repeal lost to another temporary payment patch. http://www.ama-assn.org/ama/pub/ama-wire/ama-wire.page?plckController=Blog&plckBlogPage=BlogViewPost&UID=e38cf47a-fc5f-473b-9234-c9e714c1c8f0&plckPostId=Blog%3ae38cf47a-fc5f-473b-9234-c9e714c1c8f0Post%3aaf492466-72dd-449d-a053-8720eacadb3f&plckScript=blogScript&plckElementId=blogDest#.U1bBL8cnunu. Published April 1, 2014. Accessed April 14, 2014.
  5. Lawmakers announce bipartisan deal to repeal, replace SGR. www.californiahealthline.org/articles/2014/2/7/lawmakers-announce-bipartisan-deal-to-repeal-replace-sgr. Published February 7, 2014. Accessed April 10, 2014.
  6. The United States Senate Committee on Finance. Hatch calls for return to bipartisan, bicameral talks to advance bill to permanently fix broken SGR formula. http://www.finance.senate.gov/newsroom/ranking/release/?id=38523414-4dd3-478e-945a-111ecc1ca5bf. Published March 31, 2014. Accessed April 10, 2014.
  7. Carlson J, Robeneznieks A. ICD-10 delay puts pressure on CMS for answers. Modern Healthcare. www.modernhealthcare.com/article/20140401/NEWS/304019940/icd-10-delay-puts-pressure-on-cms-for-answers. Published April 1, 2014. Accessed April 10, 2014.

 

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