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Obama Quietly Signs SGR Patch Bill

 |  By John Commins  
   April 02, 2014

The new law delays both the implementation of the ICD-10 code set and the so-called two-midnight rule, which affects hospital reimbursements. The law also includes critical funding extensions for rural hospitals.

President Barack Obama late Tuesday night quietly signed a bill rushed through Congress in the last five days. It delays for one year a 24% cut in Medicare reimbursements mandated under the Sustainable Growth Rate funding formula. It also delays for one year the ICD-10 coding set implementation deadline and the so-called two-midnights rule.

There was no signing ceremony and the president offered no comments for or against theProtecting Access to Medicare Act of 2014 (H.R.4302).

Instead, the White House press office issued a terse statement noting that the bill delays mandated SGR cuts until April 1, 2015, the 17th such delay in the past 11 years. The White House also acknowledged that the bill's intent is to "extend other health-related provisions set to expire, and to make other changes to current-law health provisions."


Latest ICD-10 Delay Re-shuffles the Deck, Irritates Players


Those changes include two other controversial and costly provisions stuck inside the 121-page bill. They delay by one year both the implementation of the ICD-10 medical coding set and the two-midnights rule.

H.R.4302 passed the House last Thursday in just 25 seconds during a hastily convened voice vote. There was no debate and there is no record of how the votes were cast.

The Senate followed suit on Monday night after brief but fierce debate, and easily passed the bill on a bipartisan 64-35 vote.

The new law has broad implications for just about everyone in the healthcare sector, from patients to providers to vendors, and the passage of the bill and its railroading through Congress left stakeholders sharply divided.

Even though the law delays for one year potentially devastating reimbursement cuts for physicians, the legislation was bitterly opposed by the American Medical Association, which had made finding a permanent fix for the SGR its top legislative priority this session.

AMA, CHIME Disappointed
AMA President Ardis Dee Hoven, MD, says Congress "failed to seize a historic opportunity" to find a permanent fix, even as physicians were led to believe up as late as this week that some sort of deal was at hand.

"Up until the final hour, multiple members of Congress spoke publicly about the need for reform, and several bills that used the agreed-upon SGR repeal policy were put forth," Hoven said in a letter to AMA members.

"The problem was that the bipartisan collaboration that had characterized the policy development phase collapsed when it came to paying for the legislation. The various funding sources brought forth were so politically polarizing that some of the proposals never even made it to a vote. We continued to urge Congress to resume bipartisan, bicameral collaboration to reach agreement on an acceptable way to pay for repeal. But this step appears to be one they were unwilling to take, letting their political interests trump good policy choices."

The College of Healthcare Information Management Executives was stunned by the delay in ICD-10, which they said was slipped into the bill to appease specialty physician associations. CHIME is still assessing the affect and cost of the one-year delay and it called on the Centers for Medicare and Medicaid Services to "provide new guidance to the industry on what the delay means for providers, vendors, clearinghouses and other concerned parties."

"The delay leaves numerous unanswered questions from testing, training, and revamping the agency's education resources, such as the CMS eHealth University, designed to help providers understand, implement, and successfully participate in the conversion process," CHIME said in a statement.

"The ICD-10 delay comes at a critical time just as providers are implementing new care models that would benefit from greater coding accuracy and specificity, such as patient-centered medical homes and value-based purchasing."

In sharp contrast, the American Hospital Association cheered after it successfully lobbied to attach the delay of the two-midnight rule and to extend the suspension of recovery audits for another year.

Effect on Rural Hospitals
The new law also includes critical funding extensions for rural hospitals, "including the Medicare Dependent Hospital program and the low-volume adjustment, eliminates cuts in 2016 to the Medicaid Disproportionate Share Hospital program, and delays for an additional six months the ill-advised two-midnight policy, while precluding recovery audit contractors from second guessing decisions made by physicians related to this policy," AHA said in a statement.

"The offsets to pay for this package include a variety of different provisions that impact various sectors of the healthcare field, while the hospital provisions basically represent a continuation of current policies 10 years from now rather than any new cuts."

AHA says it did not get everything it wanted. "We are disappointed that certain provisions for rural hospitals were not included in the legislation, such as relief from both the so-called 96-hour rule for critical access hospitals, and enforcement of the direct supervision requirement for rural hospitals. In addition, relief from cuts to Medicare (disproportionate share) payments were not included, and need to be revisited by the Congress."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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