Tuesday, April 1, 2014

Congress Passes “Doc Fix,” Includes AHCA-Influenced Readmissions Plan

Drew Thies

The Senate voted 64-35 Monday night to pass a one-year patch of the Medicare physician payment schedule, known as the sustainable growth rate (SGR). The Senate adopted the House’s version, the 'Protecting Access to Medicare Act of 2014,’ which was passed late last week. Included in the legislation is a value-based purchasing program for skilled nursing centers that establishes a hospital readmission reduction program for the profession.

Long term and post-acute care providers have been a target for funding previous SGR patches, which frequently cost in the tens of billions of dollars. This year, with the counsel of AHCA, Congress developed a method of saving $2 billion by creating an incentive structure for reducing hospital readmissions from skilled nursing centers. This new program was used in lieu of a straight cut, such as a market basket reduction.

Under the provision, the Secretary of Health and Human Services will withhold 2% of Medicare payments annually beginning in FY 2019 in order to generate an incentive pool and savings to Medicare. More than half (50-70%) of the withheld funds will then be distributed among high-performing providers, which will be determined by the Secretary in the coming years. Depending on performance, it could be possible for providers to avoid any penalty and potentially, some could achieve a greater payment rate.

The financial implications of the program are not set to start for another four years at the beginning of FY 2019, which begins October 1, 2018. Before then, CMS will be creating the readmission measure, scoring system, incentive pool and monitoring structure needed to implement this program.

Going forward, AHCA will begin to work closely with CMS and the Secretary in order to insure that the monitoring and incentive structure put in place is best for the profession. When the next administration takes office, AHCA will lobby hard to ensure the maximum amount of the incentive pool—70%—is returned to providers.

Other provisions in the one-year doc fix impacting SNFs included:
  • Extension of the therapy caps exception to the April 1, 2015 deadline. Though AHCA’s language to improve the Manual Medical Review (MMR) process was not included in the short-term patch, AHCA’s administrative advocacy efforts continue to move CMS towards alleviating these burdens internally. More on that here.
  • A one-year implementation delay of the new ICD-10 code sets. The new code sets used to report medical diagnoses and inpatient procedures will now take effect October 1, 2015.
The one-year doc fix will preserve physicians’ Medicare payments until April 1, 2015, at which point another patch will have to be passed unless the SGR is repealed and replaced.

The Senate vote came on the heels of a controversial voice vote for the bill in the House last Thursday. President Obama signed the legislation into law yesterday evening.

Many in both the House and the Senate attempted to pass a permanent fix to the SGR, but the price tag sparked controversy that derailed previously bipartisan negotiations. “We don't have the votes to do what would be the better thing to do,” said Senate Majority Leader Harry Reid before the patch was passed in the Senate.

The remainder of the 2014 legislative calendar is, as of now, risk-free for long term and post-acute care providers. AHCA’s team, however, will continue to build lasting relationships on The Hill in order to ensure that if unknowns do arise, we will be well-prepared to respond to them.

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