Senate to Vote When It Returns – CMS Issues Payment Advisory

The House of Representatives took what the House of Medicine rightfully can call a historic vote late in the evening of March 26 to really, truly repeal the SGR and to provide the nation’s physicians with minimal but predictable 0.5% Medicare physician payment increases beginning July 1, 2015, and continuing for each year through calendar year 2019.

H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA), passed the House on a strong bipartisan vote of 392-37. Iowa’s congressional delegation split. Iowa Representatives David Loebsack and David Young voted in favor of the bill; Representatives Rod Blum and Steve King voted against it.

H.R.2 moved to the Senate on the heels of the congressional April recess. The Senate took no action but Senate leadership indicated the likelihood of passage of SGR repeal upon the Senate’s April 13 return. It is not clear whether the Senate will support all other provisions now in H.R. 2 or seek to amend the bill. The President has indicated his support for permanent SGR repeal.

The 21% SGR payment reduction will go into effect on April 1. CMS issued a payment advisory on March 24 in light of the looming April 1 date, clarifying that all claims for services rendered on or before March 31 would not be affected if the SGR went into effect on April 1; those claims would be paid under the physician fee schedule now in effect. Under current payment processes, CMS would not pay claims for services rendered on or after April 1 until 14 calendar days after electronic receipt or 29 calendar days after paper receipt of such claims. In light of the Senate’s decision to not take a vote on H.R. 2 prior to recess, CMS has advised Medicare carriers to hold claims for services provided on or after April 1 for 10 days to avoid any need to make payment adjustments in this interim time period. The Iowa Medical Society’s website ( provides billing guidance to its physician members for services provided on April 1 and onward until repeal legislation is finally approved.

H.R. 2, the MACRA bill, is a “bill within a bill,” incorporating Medicare physician payment reform provisions set forth in H.R. 1470, a bipartisan, bicameral committee bill, and including provisions of its own addressing Medicare extenders and payment offsets. Key provisions of H.R. 1470/H.R. 2 include the following:

  • Immediate and permanent SGR repeal.
  • A positive 0.5% annual physician Medicare payment update, with the first update to occur on July 1, 2015, and then in each of calendar years 2016-2019. MedPAC must submit reports to Congress in 2019 evaluating the impact of the 2015-19 updates on beneficiary access and quality care and making recommendations on further updates. Medicare rates in effect in 2019 would be maintained through 2025, shifting focus to payment increases through incentives for achieving identified quality program goals.
  • Consolidation of three current Medicare quality reporting programs – the Physician Quality Reporting System (PQRS), the Value-Based Modifier (VBM), and Meaningful Use for EHRs (EHR MU) – into a simplified, merit-based incentive payment system (MIPS), effective in calendar year 2019. Eligible professionals, including physicians and several other health professionals, will be measured on four areas of performance: quality; resource use; EHR meaningful use; and clinical practice improvement. Public reporting of results is addressed.
  • A 5% incentive payment to those physicians who participate in alternative payment models and meet certain performance thresholds.
  • The 1.0 Work GPCI floor is extended through December 2017, a provision of benefit to Medicare Part B payment localities like Iowa with labor costs set by CMS at lower than the national average.
  • The therapy cap exceptions process is extended through December 2017, allowing patients who exceed Medicare’s annual per-patient therapy expenditure limit to ask for an exception based on medical necessity.
  • Funding for Community Health Centers (CHC) and National Health Service Corps Fund (NHSC) and Teaching Health Centers is extended through fiscal year 2017.
  • The Children’s Health Insurance Program (CHIP) program and funding for it is extended through fiscal year 2017. While CHIP has been authorized through 2019, current funding for CHIP is slated to end at the close of the 2015 fiscal year. H.R. 2 also extends funding support for several CHIP-related programs.
  • Guidelines or standards developed and/or implemented under any Federal health care provision, including Medicare, cannot be construed on their own as standards or duties of care owed by a health care professional to a patient in any medical malpractice action or claim. This provision is not meant to preempt any state or common law governing medical malpractice actions or claims.
  • Electronic health records must be interoperable by 2018.
  • The Government Accounting Office (GAO) shall issue a report on barriers to expanded use of telemedicine and remote patient monitoring.
  • Funding offsets to meet the $140 billion estimated costs of this legislation require, among other things, that effective with new plans sold in 2020, beneficiaries new to Medicare must have the same deductible under their private Medigap insurance policies as they have under Medicare Part B; currently that amount is $147 per year. In addition, beginning in 2018, bump-up Part B and Part D premium amounts that Medicare beneficiaries with higher annual incomes now must pay would be increased. Too, a scheduled one-time 3.2% hospital payment increase in fiscal year 2018 would instead by phased-in at 0.5% increases each year over 6 years beginning in fiscal year 2018.

H.R. 2 does not extend the October 1, 2015 effective date for implementation of ICD-10. The ICD-10 Coalition, with membership including the American Hospital Association (AHA), American’s Health Insurance Plans (AHIP), the American Health Information Management Association (AHIMA), and the BlueCross and Blue Shield Association (BCBSA) – hailed the lack of extension, claiming that ICD-10 coding will assure the availability of data needed to accurately assess quality and value.

Further details about H.R. 2 and incorporated provisions of H.R. 1470 can be found in summaries prepared by staff of the House Committees on Energy and Commerce and Ways and Means.

The text of the bill is available at