Revenue Cycle Management Blog | GroupOne Health Source

Senate Passes Bill Stabilizing Doctors' Payments and Ending SGR Formula

Written by Kaitlyn Houseman | April 14, 2015

The Sustainable Growth Rate (SGR) formula has been eliminated. The Senate voted 92-8 to pass the Medicare Access and CHIP Reauthorization Act of 2015, which will replace the Sustainable Growth Rate. It was passed on the eve of a 21 percent cut to physicians' Medicare payments which was set to take place. Instead, the new legislation removes much of the instability and uncertainty that long has plagued the Medicare payment system so practices can focus on patient care. A huge step in the right direction, the bill also includes several other important improvements for physician practices. 

The Medicare Access and CHIP Reauthorization Act of 2015 provides positive annual payment updates of 0.5 percent, starting July 1 and lasting through 2019. Claims that were held for the first half of April will be processed and paid at the rates that were in place before the 21 percent cut was scheduled to take effect.

According to AMA Wire, the legislation outlines several provisions that should be beneficial for physicians, including:

  • Medicare’s current quality reporting programs will be streamlined and simplified into one merit-based incentive payment system, referred to as “MIPS.” This consolidation will reduce the aggregate level of financial penalties physicians otherwise could have faced.
  • Protections are included so that medical liability cases cannot use Medicare quality program standards and measures as a standard or duty of care.
  • Incentive payments will be available for physicians who participate in alternative payment models and meet certain thresholds.
  • Technical support will be provided to help smaller practices participate in alternative payment models or the new fee-for-service incentive program.
In an effort to minimize financial effects on providers, CMS previously instituted a 10-business day processing hold for all impacted claims with dates of service April 1, 2015, and later.
While the Medicare Administrative Contractors (MACs) have been instructed to implement the rates in the legislation, a small volume of claims will be processed at the reduced rate based on the negative update amount. The MACs will automatically reprocess claims paid at the reduced rate with the new payment rate.