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New “Doc Fix” Agreement Reached; ICD-10 to be Delayed Again

Posted in Affordable Care Act, Legislation and Public Policy, Medicare and Medicaid, Reimbursement Matters

At a press conference on March 26, House Speaker John Boehner (R-OH) stated that a deal has been reached in Congress to delay cuts in payments to Medicare providers until March 31, 2015. Boehner said he and Senate Majority Leader Harry Reid (D-NV) agreed on the new 12-month extension, and the Senate and House of Representatives are expected to vote on the bill this week.

The latest action is intended to give Congress additional time to agree on legislation to permanently repeal the Sustainable Growth Rate (SGR) formula upon which annual Medicare physician fee schedule changes are based. The annual “doc fix” problem and proposed SGR repeal bills were previously discussed here.

The Bipartisan Budget Act of 2013, signed into law by President Obama in December, included a three-month “patch” that prevented a scheduled 20.1% reduction in Medicare payments to physicians and other providers from taking effect on January 1, 2014. Without a new patch, there would now be a 24% payment reduction beginning April 1.

Since January 1, three congressional committees – Senate Finance, House Ways and Means, and House Energy and Commerce – have worked on various alternative methods to implement a permanent fix. One proposed bill, the SGR Repeal and Medicare Provider Payment Modernization Act, had broad bipartisan support, but lawmakers have been unable to agree on how to pay for it. Congressional Budget Office estimates at various times have indicated that a permanent SGR repeal would cost the U.S. Treasury between $116 billion and $180 billion over 10 years.

Some congressional proposals for a permanent fix have included the creation of new incentive-pay systems for physicians.  One recent proposal, which was passed in the Republican-controlled House on March 14, attempted to tie the proposed fix to a repeal of the “individual mandate” under the Affordable Care Act, but it was rejected by Democratic leaders of the Senate.

The new 121-page proposed bill includes a number of provisions that are unrelated to the “doc fix,” including another one-year delay (until October 1, 2015) in the transition from the ICD-9 diagnostic and procedural code set to the worldwide ICD-10 standard.  ICD-10 was originally intended to be implemented in the U.S. by October 1, 2011.

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