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House Sends One-Year "Doc Fix" Bill to Senate for a Monday Vote

Last Thursday the House bypassed long-term Medicare reform of the Medicare physician sustainable growth rate (SGR) and instead voted under suspension of the rules to pass H.R. 4302, legislation to provide a one year patch, putting off a payment reduction until March 31, 2015. If approved by the Senate on Monday and signed into law as expected, the “Protecting Access to Medicare Act of 2014” will again delay the 24% cut to physicians scheduled to begin on April 1st and instead provide a 0.5% increase through calendar year 2014 and freeze the final rates through March 31, 2015. In general, members on both sides of the aisle expressed disappointment that the bipartisan/bicameral long-term reform of the Medicare SGR payment platform was again put off until the 114th Congress convenes. Rep. Joe Pitts (R-PA) said he sponsored the bill because “it is my earnest hope that this is the last patch we will have to pass….” House Minority Leader Nancy Pelosi (D-CA) said that taking up the temporary fix in place of a more permanent solution was a “missed opportunity.” Nonetheless, House Energy and Commerce Committee Chairman Fred Upton (R-MI) said that the action does not prevent the House from getting a permanent fix done, but it is the “best we can do now”. The Congressional Budget Office (CBO) estimated on a preliminary basis that the one year extension of physician pay rates would cost $11.2 billion through fiscal year (FY) 2015 and $15.8 billion over ten years. The legislation also includes several health-related extenders and riders which the CBO estimated would cost $14.4 billion through FY 2015, but save $1.2 billion over ten years. Of note, the bill does not include spending or revenue provisions offsetting the above costs. Among the add-ons: one amendment would delay until October 1, 2015, the beginning of FY 2016, the proposed action by the Centers for Medicare and Medicaid Services (CMS) to implement the latest revision of the International Classification of Diseases (the 10th Revision (ICD-10) of the Medicare diagnostic code billing system); CBO said another provision would result in a $4 billion savings over ten years by directing CMS to establish an annual 0.5% Medicare physician payment savings target, in particular by considering changes to the RVS Update Committee (RUC) billing codes that among other things have resulted in the fastest growth and been used multiple times for a single treatment; another provision would require physicians to document the use of Health and Human Services (HHS) and specialty group guidelines in ordering CT scans with non-compliance resulting in possible preauthorization requirements; Medicare payments would also be cut for physicians who do not use equipment with “dose optimization” features; two new mental health grant programs would be established; another provision would delay until April 1, 2015 the use by recovery audit contractors (RAC) of the so-called “two-midnight” rule which helps them determine the legitimacy of the length of hospital stays; another amendment would repeal section 1302(c) of the Patient Protection and Affordable Care Act (PPACA) which places a $2,000 cap on the allowable deductible for small group insurance plans covering one person and a $4,000 cap for family policies; other provisions spell out the terms of a number of so-called Medicare “extenders” and other policy changes (see Appendix I). The House’s SGR patch bill, which delays the consideration of possible offsets for long-term SGR reforms until after the November elections, will be taken up Monday in the Senate, subject to a no-amendment 60 vote threshold according to Senate Majority Leader Harry Reid (D-NV). He put the need for the temporary fix on the Senate Finance Committee who he said did not come up with a means to pay for permanent reform. Senator Orrin Hatch (R-UT), Ranking Republican of the Senate Finance Committee, introduced S. 2122, legislation that would provide for long-term SGR reform and offset the CBO estimated cost of $180.3 billion over ten years by mitigating the PPACA’s penalty for failure to meet the individual mandate. The similar bill passed by the House, H.R. 4015, is still pending in the Senate. Senate Finance Committee Chairman Ron Wyden (D-OR) said last week that he was still working with members to come up with an offset that is agreeable to all parties.

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