Reg's Blog

Senior and Post-Acute Healthcare News and Topics

Doc Patch in the Works

Yesterday, the Speaker of the House (John Boehner) announced that a compromise is forthcoming to alleviate, for one year, the pending 24% payment reduction to the Physician Fee Schedule arising out of the current SGR formula. Ten days or so ago I wrote a post regarding a House bill that repealed the SGR but contained a “poison-pill” provision assuring its death in the Senate ( http://wp.me/ptUlY-gm ). As is the common methodology in Congress today, this initiative is a “patch”; another extension of the current status quo, delaying any SGR implications for one year.  Alas, while the SGR demands fixing, permanently, no traction is available among the parties to resolve the issue.

What the compromise does and doesn’t do is as much the center of debate as any efforts to replace the SGR with a more permanent formula.  In summary, the compromise;

  • Staves off the 24% cut but doesn’t restore any cuts related to sequestration.
  • It delays the implementation for hospitals of the 2 midnight rule for another six months.  The 2 midnight rule essentially reduces Medicare payments to hospitals for short in-patient stays.  It requires admitting physicians to have justification for the inpatient stay and if the same is lacking, the stay could be deemed (by RAC auditors) outpatient observation and thus, paid under Part B  at a lower rate.  The Bill would delay RAC auditors ability to review such stays until March of 2015 and give CMS authority in the interim and beyond, the ability to probe and educate but not re-classify stays.
  • It extends the implementation of ICD-10 for one more year.
  •  It extends certain programs that provide additional funding for rural hospitals.

While no one wins under these compromises, the Patch is likely to pass both houses quickly, viewed as a better alternative than the SGR cuts.  For post-acute providers, this is good enough news as the therapy fee schedule was subject to the same 24% reduction.

Interesting to note is that while the Bill extends the implementation of the 2 midnight rule, it doesn’t address the backlog of Administrative Appeals that continues to mount due to the Medicare RAC initiative.  This backlog is enormous and growing and it is the sole source initially, for providers to appeal RAC decisions.  I know of multiple providers today in the appeal queue waiting for a review of what appears to be, many erroneous determinations and shabby reviews of claims.   More on this in another post – later.

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March 27, 2014 - Posted by | Policy and Politics - Federal | , , , , , , , , , ,

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