House Passes 12-Month SGR 'Doc Fix' by Voice Vote

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9:46 a.m. PT: This story has been updated.

On Thursday morning, the House passed by voice vote a proposal (HR 4302) to delay for 12 months a scheduled 24% cut to Medicare physician reimbursements, The Hill's "Floor Action" reports. The bill now heads to the Senate (Kasperowicz, "Floor Action," The Hill, 3/27).

House Speaker John Boehner (R-Ohio) on Wednesday announced that he and Senate Majority Leader Harry Reid (D-Nev.) had agreed on the proposal (Demko, Modern Healthcare, 3/26).

Background

The current three-month "doc fix" expires on April 1. House and Senate lawmakers had been working to develop final legislation that would repeal and replace the sustainable growth rate formula, which sets Medicare physician payment rates. However, disagreements over cost offsets in separate Democratic and Republican-sponsored proposals threatened to prevent a final bill from being passed before Monday.

Two weeks ago, the House approved a GOP-led bill (HR 4015) with an amendment that would delay implementation of the Affordable Care Act's individual mandate for five years. However, the White House issued a veto threat, and Senate Democrats have said the amendment is a non-starter and will not be brought up for consideration. Meanwhile, Senate Democrats released their own SGR proposal (S 2110), but it is likely to become entangled in a debate over how to offset its 10-year, $180 billion cost (California Healthline, 3/24).

Details of SGR Patch

According to the AP/Washington Times, the compromise measure contains a slew of additional health care provisions and benefits for physicians, hospitals, drug makers and other providers.

For example, the proposal would:

  • Grant Medicare physicians a 0.5% fee increase through the end of 2014;
  • Provide higher Medicare payments to hospitals in rural areas and for ambulance services in such areas;
  • Establish two new mental health grant programs, one of which would receive $60 million over four years to improve outpatient treatment for individuals with serious mental illnesses (Taylor, AP/Washington Times, 3/26);
  • Delay the deadline to implement the new ICD-10 diagnostic and procedure code sets by one year, to Oct. 1, 2015 (Conn, Modern Healthcare, 3/26);
  • Delay implementation of the new inpatient payment rule for hospitals, known as the two-midnight rule, by six months, to March 2015 (Demko, Modern Healthcare, 3/26); and
  • Implement $2 billion in payment reductions over 10 years to skilled nursing providers (Adams, CQ HealthBeat, 3/26).

In addition, the compromise proposal would delay by an additional year -- to fiscal year 2017 -- the start of scheduled annual Medicaid reductions to hospitals that treat a disproportionate share of low-income patients, the Washington Post's "Wonkblog" reports. The expiring three-month SGR patch had already delayed the start of the cuts to FY 2016, which would continue through FY 2023 (Millman, "Wonkblog," Washington Post, 3/26).

According to Modern Healthcare, the Congressional Budget Office has not issued a full cost analysis of the plan, but it is projected to cost at least $20 billion for one year (Demko, Modern Healthcare, 3/26). However, AP/U-T San Diego reports that a preliminary analysis released Wednesday night shows that health spending would increase by $14 billion over the next two years and about $11 billion of the savings from the proposal would not be accrued until 2024 (Taylor, AP/U-T San Diego, 3/27).

While the bill does not outline any cost offsets over a 10-year period, it includes language exempting it from the usual "PAYGO" scorecard, The Hill's "Floor Action" reports. The measure would reorganize scheduled Medicare sequester cuts for FY 2024 and 2025 so that they all take place in FY 2024 (Kasperowicz, "Floor Action," The Hill, 3/26).

AMA Criticizes SGR Patch, Urges House To Reject Bill

Meanwhile on Wednesday, the American Medical Association -- which has repeatedly called on Congress to approve a long-term, permanent solution to the SGR problem -- issued a statement urging House lawmakers to reject the bicameral compromise SGR patch when it comes up for a vote, The Hill's "Healthwatch" reports.

AMA President Ardis Dee Hoven said a temporary fix that delays payment cuts also "undermine[s] future passage of the permanent repeal framework" and "would perpetuate the program instability that now impede the development and adoption of health care delivery and payment innovation" (Viebeck, "Healthwatch," The Hill, 3/26).


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