FOCUS OF THE WEEK
House Passes Extension of Medicare 'Doc-Fix'
March 28, 2014, 08:00:33 AM
Katie Sullivan, MA
The House of Representatives passed a controversial bill that will extend the sustainable growth rate (SGR) formula for physician payments for 1 year. Also known as the “doc fix,” the bill acts as a temporary solution to the ongoing problems with the SGR formula, a reimbursement model which determines physicians’ Medicare funding levels. In addition, the bill will delay the deadline for health systems to integrate ICD-10 diagnostic and procedural codes. The bill’s passage has caused an unfavorable reaction among many physician groups, especially following a statement by Centers for Medicare & Medicaid Services administrator Marilyn Tavenner which had said there would be no extension of ICD-10.

“By extending the Medicare provider sequester and ‘cherry picking’ a number of cost-savings provisions included in the bipartisan, bicameral framework, the (bill) actually undermines future passage of the permanent repeal framework,” said American Medical Association president Dr Ardis Dee Hoven. “Further, it would perpetuate the program instability that now impedes the development and adoption of healthcare delivery and payment innovation that can improve healthcare and strengthen the Medicare program.”

The bill also calls for a 6-month delay of the 2-midnight rule, a new payment rule for hospitals. It says that physicians must have a good reason to admit a patient for 2 nights before Medicare will reimburse them at the full rates of an inpatient stay. Without verification and documentation, Medicare will classify and bill those patients as outpatients.

“We have a choice. We can either continue on with the status quo in Medicare by enacting a 17th patch—reinforcing a flawed payment formula that jeopardizes seniors’ access to their doctors, pits provider groups against each other, and fails to actually improve the Medicare program,” said Senate Finance Chair Ron Wyden. “Or, we can end the budget fiction that is the SGR, provide certainty to seniors and their doctors, and get the ball moving on bipartisan Medicare reforms—paying for value, managing chronic illness, increasing data transparency, and finally moving away from fee-for-service payment that got us into this mess.”

House Minority Leader Nancy Pelosi agreed, and described the bill as a temporary fix—one that does little to sufficiently address the issues that surround the SGR formula. “There are so many things that are wrong with this bill, but the simple fact is that the clock is ticking, and on March 31, it’s bad news for our seniors and the doctors that treat them.”

Around the Web

House Passes Contested 'Doc-Fix' Patch with ICD-10 Extension [Modern Healthcare]

In Voice Vote, House Approves Medicare ‘Doc Fix’ [The Washington Post]