House Passes Medicare Part B Reform
On Thurs., March 27, the House of Representatives passed bipartisan legislation that among other things, repeals the current Sustainable Growth Rate (SGR) formula based methodology for determining annual updates to the Medicare Physician Fee Schedule (MPFS). The MPFS determines Medicare Part B rates paid to physicians and other practioners, along with the ancillary rates paid to nursing homes and home care providers for ancillary services.
The measure, HR 2 Medicare Access and CHIP Reauthorization Act of 2015, passed the House with an overwhelming majority of 392 to 37, with 33 Republicans and 4 Democrats voting no. In general, LeadingAge and LeadingAge NY support the measure which promises to end the annual threat of massive negative adjustments to the MPFS. Contained within HR 2 is HR 1470 SGR Repeal and Medicare Provider Payment Modernization Act, which specifically addresses the SGR issue. The need for eliminating the SGR is generally referred to as the "Doc Fix." The Senate must now act to take up the House measure.
April 1, 2015 is the deadline by which currently authorized extenders for both the Medicare Part B payments and the therapy caps exceptions process will expire (for more details, please click here). As the Senate goes into recess for the period of Mon., March 30 to Fri., April 10, it is unlikely that they will act in time to meet the deadline. There are steps the Centers for Medicare and Medicaid Services (CMS) may be able to implement to buy some time on the issue. In years past, we have also seen providers being instructed to hold claims pending Congressional action. In general, most commentators believe that with this significant bipartisan support in the House, the Senate is likely to approve their version of the measure. According to Senate Majority Leader Mitch McConnell (R-KY), "It's encouraging this passed the House with such a large bipartisan majority, and I want to assure we’ll move to it very quickly when we get back… I think there is every reason to believe it's going to pass the Senate by a very large majority."
The President has officially stated that he will sign the bill immediately upon Senate passage and applauded the House for its leadership on this issue.
Interim Claims Processing Concerns: CMS is instructing its carriers to “hold” any claims for services provided on Wed., April 1 and beyond for 10 days, until legislation can be passed and signed into law that reverses the 21.2 percent cut. The 10-business-day hold means that April claims will be held through Tues., April 14. Since no claims by law can be paid sooner than 14 calendar days from their receipt, this hold should have little practical impact on Medicare remittance in the short-term. The process for handling copayments and claims reconciliation remains unclear.
Medicare is required to pay Part B claims at the lesser of charges or the Medicare approved amount. In the event that Congress allows the 21.2 percent reduction to take effect, even temporarily, Medicare would have to pay at the reduced amount and Congress would have to authorize retroactive rate adjustments.
Following are some additional highlights of the House bill as presented in the House Energy and Commerce and Ways and Means Committees Working Framework Analysis.
The Repeal and Replacement of the SGR Methodology (HR 1470): The legislation repeals the current methodology and moves the MPFS towards a more stable system with a greater focus on value based payment and a shift away from volume driven fee-for-service reimbursement. According to the House Committees, Congress has had to authorize nearly $170 billion dollars in stop gap fixes due to the flaws in the SGR.
Assuming that eventually the measure will be effective for April 1 MPFS rates, the immediate impact on payments will be to eliminate the scheduled 21.2 percent reduction in Part B rates and keep rates at their current levels through June 2015. There would be a 0.5 percent minimum increase effective July 2015 through 2019.
A “Merit-based Incentive Payment System” (MIPS) quality program would implement some features of Medicare’s current quality programs, including the Physician Quality Reporting System (PQRS), Meaningful Use (MU), and Value Based Payment Modifier (VBM) programs.
Children’s Health Insurance Program (CHIP): This provision preserves and extends CHIP through September 30, 2017.
The Medicare DMEPOS Competitive Bidding Improvement Act (HR 284) makes modifications to the Medicare durable medical equipment, prosthetics, orthotics and supplies competitive acquisition program.
The Protecting Integrity in Medicare Act (HR 1021) strengthens Medicare’s ability to fight fraud and builds on existing program integrity policies.
Income-related Premium Adjustment (effective 2018) provides for an increase in the percentage that beneficiaries pay toward their Part B and D premiums in two income brackets (roughly 2 percent of beneficiaries): for individuals with income between $133.5-160K ($267-$320K for a couple), the percent of premium paid increases from 50 percent to 65 percent. For those with income between $160-214K ($320-$428K for a couple), the percent increases from 65 percent to 75 percent.
Medigap Reform limits the first dollar coverage on certain Medigap plans by prohibiting plans from covering the Part B deductible. This measure only applies to future retirees effective in 2020.
One Percent Market Basket Update for Post-Acute Providers replaces the market basket update in 2018 with a one percent update for long-term care hospitals, skilled nursing facilities, inpatient rehabilitation facilities, home health providers and hospice providers.
LeadingAge and LeadingAge NY will continue advocating for Senate approval, and will continue to provide members with the latest updates, including guidance on any interim claims processing issues that may arise.
Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827