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From Health Law Daily, March 24, 2015

New bipartisan bill would wipe out SGR, extend CHIP, and add laundry list of changes

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

A bipartisan group comprising leadership of the House Energy and Commerce Committee introduced HR. 2, the Medicare Access and CHIP Reauthorization Act, on March 24, 2015 to repeal the sustainable growth rate (SGR), extend funding for the Children’s Health Insurance Program (CHIP), and address a host of other Medicare and Medicaid payment issues. The legislation builds on and modifies H.R. 1470, which was introduced March 19, 2015 (See SGR repeal bill would stabilize doc payments, combine incentive payments, March 19, 2015)

SGR provisions. The SGR provision currently requires Medicare payments to physicians to be cut whenever spending exceeded targets, and the cuts were to be cumulative. Without SGR repeal, payments to doctors would be cut by more than 20 percent. Congress has deferred these cuts with a patch continuously since 2003. Like H.R. 1470, H.R. 2 would repeal the SGR and increase physicians’ payments by 0.5 percent from July 1 through December 31, 2015 and for each calendar year through 2019. Beginning in 2020, the update would be 0 percent until 2025. Beginning January 1, 2026, there would be two conversion factors applied, one for physicians who qualify as alternative payment model (APM) participants and one for those who do not. Under H.R. 2, the rate update for APM participants would be 0.75 percent, and the rate for physicians who do not qualify as APM participants would be 0.25 percent.

CHIP extension. Although the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) (P.L. 111-3) extended the CHIP through 2019, it provided funding for the program only until through fiscal year (FY) 2015, which ends September 30, 2015. H.R. 2 would appropriate $16.3 billion for FY 2016, $2.85 billion for the period from October 31, 2016 through March 31, 2017 and another $2.85 billion for the period from April 1, 2017 through September 30, 2017.

Medicare-related extensions. H.R. 2 would extend the 1.0 “floor” on the Geographic Practice Cost Index, the ambulance add-on payment, and the Medicare rural home health add-on until January 1, 2018. It also would extend 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 through FY 2017. Enforcement of the “two-midnight rule” concerning inpatient hospital services would be delayed until September 30, 2015.

Medicaid-related extensions. 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 for parents whose income increases because of employment or child support payments, both would be made permanent. Other Medicaid-related programs, including home visits to new mothers, infants and young children; abstinence education; personal responsibility education; family-to-family information centers for children with disabilities or special needs, were extended through FY 2017.. 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 Medicare money, 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.

MainStory: TopStory ReimbursementNews MedicaidNews MedicaidPaymentNews PartBNews PhysicianNews

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