Mar. 26—Congressional leaders have agreed to pass a one-year extension of current Medicare physician pay rates this week, House Speaker John Boehner said Wednesday.

Boehner, a Republican, said at his daily press conference that he and Senate Majority Leader Harry Reid, a Democrat, agreed to the plan, and both chambers will vote this week. A temporary patch to prevent a 24 percent cut called for by Medicare’s sustainable growth rate formula (SGR) expires March 31.

Work could continue during the one-year extension on a permanent replacement to the SGR, Boehner said.

The patch was sure to disappoint physicians who have pushed a bipartisan deal to replace the SGR with a system that moves away from fee-for-service payments and toward payments based on the quality of care delivered. That proposed legislation stalled, however, when no bipartisan option was found to cover its $138 billion, 10-year cost.

The SGR was designed in the 1990s as a way to control Medicare spending growth, but Congress has blocked cuts called for by the formula numerous times since then. The last-minute, and sometimes retroactive, blocks to the cuts have left physicians facing deep uncertainty over Medicare payments.

"What there isn't agreement on is, how are we going to pay for it?" Boehner said, according to news reports.

The House recently passed a permanent so-called “doc fix,” which was funded through a five-year delay in the tax penalty owed by most Americans if they fail to purchase qualifying health insurance coverage, as required by the Affordable Care Act.

Senate Democrats prefer using savings they cite from the drawdowns in Iraq and Afghanistan to pay for the bill. Both parties oppose the funding approach favored by the other, and the White House has promised a veto of the Republican approach.

Hospitals Benefit Under Proposed Legislation

The proposed legislation containing the SGR patch also includes both extensions of expiring payment provisions and delays in cuts in future payments to hospitals.

Among the biggest potential impacts on hospitals could be a six-month extension—to April 1, 2015—of the so-called probe-and-educate limited enforcement of the new two-midnight admissions rule.

The bill also pushed back by one year—to 2017—the start of cuts in Medicaid disproportionate share hospital payments. The cuts also would continue one year longer—to 2024.

The changes were described as a potential “modest positive for the group” in a Wednesday report by Bank of America Merrill Lynch.

Additionally, the bill would extend to April 1, 2015:

  • The Medicare dependent hospital program 
  • Increased inpatient hospital payment adjustment for certain low-volume hospitals
  • Ambulance add-on payments
  • The work GPCI floor
  • The therapy cap exceptions process 

The bill also would delay for another year—until Oct. 1, 2015—the movement to ICD-10 code sets.

Publication Date: Wednesday, March 26, 2014