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Senate Repeals SGR Formula

Apr 16, 2015

On April 14, the Senate voted to approve HR 2, the Medicare Access and CHIP Reauthorization Act.  The bill had passed the House of Representatives on March 26.  This legislation repeals the Medicare Sustainable Growth Rate (SGR) formula.  Following are highlights of the bill:

  • The law averts the 21% pay cut for providers that went into effect on April 1, 2015.  For the next 5 years, physicians will see annual increases of .5%.  The first increase will occur on July 1, 2015 and the next on January 1, 2016.  
  • The bill provides a 5% bonus for eligible professionals who receive a significant portion of their revenue from an alternate payment model from 2019 to 2024.
  • Implementation of the “2-Midnight Rule” is further delayed until September 2015.  Medicare administrative contractors are instructed to utilize the current “probe and educate” approach instead of allowing the recovery audit contractors to review claims.
  • Bundled payments for global surgical periods will stay intact.  However, the Centers for Medicare and Medicaid Services will be required to periodically collect information on the services that surgeons perform in the global period to ensure that payment amounts for these procedures are accurate.  
  • Physician Quality Reporting System, Meaningful Use and the Value-Based Payment Modifier programs will be combined into one Merit-based Incentive Payment System beginning in 2019.  
  • The bill also affects Medicare beneficiaries, implementing income-related premium adjustments for Parts B and D beginning in 2018.
  • There is no language directing any delay of ICD-10 implementation.  This indicates that ICD-10 is scheduled to be implemented on October 1, 2015.

The bill is now forwarded to President Obama for his approval.  The White House has indicated that the President will sign the bill into law.

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Nancy Clark

Nancy Clark is a Senior Manager in the Health Care Consulting Group. Her expertise focuses on coding and documentation audits, which includes chart review and report compilation.

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