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  • April 1, 2014

Congress Passes SGR Patch & ICD-10 Delay
On March 31, Congress passed another temporary fix to the flawed sustainable growth rate (SGR) formula. This is the 17th temporary fix to the SGR formula. The bill, Protecting Access to Medicare Act of 2014 (H.R. 4302) is expected to be signed by President Obama and would delay until March 2015 the pending 24% cut to Medicare physician payments.

Among other provisions, the bill includes:

  • A 12-month patch for the SGR and continues the 0.5% update through calendar year 2014 and a zero percent payment update from January 1, 2015 to March 31, 2015;
  • An extension of the work GPCI floor until April 1, 2015;
  • A minimum 1-year delay (the bill language states HHS may not adopt ICD-10 as the standard code set until October 1, 2015) in transition from ICD–9 to ICD–10 code sets;
  • The establishment of a market-based payment system for diagnostics under the Clinical Laboratory Fee Schedule (CLFS);
  • Development of quality incentives, including penalties for certain computed tomography services to improve radiation dosing safety and to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging.;
  • A delay of the Recovery Audit Contractor enforcement of the “two-midnight rule” through March 31, 2015;
  • A new skilled nursing facility value based purchasing program (SNF VBP) to begin in fiscal year 2019;
  • An extension of the Qualifying Individual (QI) Program that assists Medicare beneficiaries with incomes between 120%-135% of the federal poverty level (FPL) by covering the cost of their Medicare Part B premiums.

Last week, in response to the pending SGR cuts (which were scheduled to become effective April 1) the Centers for Medicare and Medicaid Services (CMS) instructed the Medicare Administrative Contractors (MACs) to hold claims containing services paid under the Medicare Physician Fee Schedule (MPFS) for the first 10 business days of April (i.e., through April 14). This hold only affects claims with dates of service on and after April 1, 2014. CMS states that the hold should have minimal impact on provider cash flow, as under current law, clean electronic claims are not paid any sooner than 14 calendar days after the date of receipt.

On March 19, the American Medical Association (AMA) published a new step-by-step guide on the Affordable Care Act’s (ACA) 90-day grace period provision. Under this provision, individuals who purchase insurance in the new health exchanges have a 90-day grace period before their coverage is cancelled for non-payment. While insurers in health exchanges are required to pay any claims incurred during the first 30-days of the grace period, they are not required to pay claims incurred during the last 60-days for any patient whose coverage is terminated. Patients are considered to be covered for care during the entire grace period, but insurers are allowed to place all the claims during the last 60-days of the grace period in a pending status and retroactively deny them when coverage is terminated at the end of the grace period.