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April 15, 2015 By Linda J Sacco Leave a Comment

Senate Passes H.R. 2 Legislation to Repeal and Replace the Medicare SGR

Last evening, by a vote of 92 – 8 the Senate passed H.R. 2, legislation that would permanently repeal and replace the Medicare Sustainable Growth Rate formula (SGR). The six amendments offered during floor consideration were all defeated. The the Senate has passed the bill in the identical form as the House passed version. This means that the bill can immediately go to the President for his signature. The President has previously agreed to sign this bill into law.
Once signed into law by the President, this bill immediately repeals the SGR, retroactive to April 1st therefore averting a 21% reduction in Medicare fee-for-service (FFS) payments to providers. It replaces the SGR with a new payment system that includes automatic payment updates for physician fee schedule payments for five years, transitions Medicare FFS payments towards a value-based payment system and incentivizes the development and participation in new, alternative payment models, among other noteworthy provisions.

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. No action is necessary from providers who have already submitted claims for the impacted dates of service.

The bill passed without reference to an ICD-10 delay, giving further momentum towards the Oct. 1, 2015 implementation deadline and creating increased urgency for those still preparing for the new medical code set.

Last year, House leadership slipped a last minute rider into SGR legislation, delaying ICD-10 for another 12 months. The postponement was the third in six years, blindsiding the healthcare community and discouraging ICD-10 proponents who were left wondering if the code set would ever see the light of day. With the passing of this bill and omission of any further ICD-10 delay legislation, those concerns now appear to be behind us.
Healthcare professionals who have been watching from the sidelines should begin preparing immediately, if they haven’t already. ICD-10 is the mandated replacement of the ICD-9 code sets used by medical coders and billers to report healthcare diagnoses and procedures. Its implementation will radically change the way documentation and coding are done and will require a significant effort to implement.

Are your ready for these changes? If not, we can help!
Call 1.877.666.5279

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