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From Health Law Daily, March 26, 2015

House passes SGR repeal

By Michelle L. Oxman, J.D., LL.M.

By a vote of 392 to 37, the House of Representatives passed H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, the House Energy and Commerce Committee has announced. If enacted as law, the bill will avoid an imminent 21 percent cut in Medicare payments to physicians, which would otherwise become effective for services provided on or after April 1, 2015, by repealing the sustainable growth rate (SGR), a statutory requirement to slash physician payments when spending targets have been exceeded. Congress has deferred the application of the SGR repeatedly since 2003 (see Reforming the broken Sustainable Growth Rate—why a temporary “doc fix” isn’t enough, and what might be, April 16, 2014).

Provisions of the bill. H.R. 2 would increase physician payments by 0.5 percent for the period from July 1 through December 31, 2015, and for each calendar year from 2016 through 2019. The increase would be set at 0.0 percent for calendar years 2020 through 2025. Beginning in 2026, two conversion factors would be used to calculate updates: one for physicians who have met the combined requirements for meaningful use of electronic health records, quality reporting, and alternative payment models (APM), and another for those who have not. Physicians qualifying for APM treatment would receive a 0.75 percent update, while the others would receive a 0.25 percent increase.

In addition, H.R. 2 would affect extend several expiring Medicare provisions. Specifically, the 1.0 “floor” on the Geographic Practice Cost Index, the ambulance add-on payment, and the Medicare rural home health add-on all would be extended until January 1, 2018. The exceptions process for therapy caps, special payments or adjustments to Medicare-dependent hospitals and low-volume hospitals, and the funding for development of quality measures would be extended through FY 2017. Enforcement of the “two-midnight rule” concerning inpatient hospital services would be delayed until September 30, 2015.

Medicaid and CHIP. The Medicaid benefits for “qualified individuals”—Medicare beneficiaries with incomes between 120 percent and 135 percent of the federal poverty level—and the transitional medical assistance program, which continues assistance for parents whose income increases because of employment or child support payments, would both be made permanent. Other Medicaid-related programs were extended through FY 2017, including home visits to new mothers, infants and young children; abstinence education; personal responsibility education; and family-to-family information centers for children with disabilities or special needs. The effective date of certain amendments to the Medicaid third-party liability requirements of Soc. Sec. Act secs. 1902(a)(25),1912, and 1917 would be delayed until October 1, 2017.

The bill contains many other provisions designed to save money for the Medicare program, including a limit on “first dollar coverage” under Medicare Supplement policies, increased premiums for Part B and Part D coverage for certain high-income Medicare beneficiaries, and a reinstatement of global payment for surgery.

Budget impact. In its analysis of H.R. 2, the Congressional Budget Office (CBO) estimated that enacting the bill would increase direct spending by $145 billion and increase revenues by $4 billion between 2015 and 2025, resulting in a $141 billion increase in federal budget deficits. Supplemental analyses by the CBO estimated that H.R. 2 would cost $0.9 billion less from 2015 to 2025 than freezing payment rates; raise federal costs relative to current law during the decade after 2025; and raise basic monthly Part B premiums by about $10 in 2025. The CBO noted that if physician payment rates were frozen at current levels, the basic monthly premium would increase by $7.50 in 2025.

The vote. The bill enjoyed broad bipartisan support. One hundred eighty Democrats joined 212 Republicans who voted in favor, while 33 Republicans and four Democrats voted against the bill. Four Democrats did not vote. Interestingly, representatives from opposite sides of the political spectrum voted for the bill, while others on each side voted against. For example, Maxine Waters (D-Calif) and Debbie Wasserman-Schultz (D-Fla) joined Paul Ryan (R-Wis) to vote in favor of the bill, while Jan Schakowsky (D-Ill) and Darrell Issa (R-Calif) both voted against it.

The bill now goes to the Senate. In a statement released on March 25, 2015 President Obama announced that he would sign it if it reaches his desk.

MainStory: TopStory HouseNews FederalLegislationNews PhysicianNews PartBNews

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