United States: Congress Moves Toward Permanent "Doc-Fix"

Last Updated: December 17 2013
Article by Andrew J. Shin, Alexander Hecht and Steve Weiner

In a significant development, the House Ways and Means Committee and Senate Finance Committee each advanced its version of Sustainable Growth Rate reform legislation on Thursday, December 12. Thus, early next year, lawmakers in both chambers are poised to consider "Doc-Fix" legislation that, if the differences can be reconciled, would replace the Sustainable Growth Rate methodology for physician reimbursement under Medicare.

Background

Shortly following the government shutdown in October, we wrote that the chances for Congress finally to pass legislation permanently replacing the flawed Medicare physician cost control formula known as the "Sustainable Growth Rate" (SGR) were greater than at any other time in recent history. We further noted that following the government shutdown in 1996 Congress was able to come together to pass several significant pieces of legislation, including the FDA Export Reform and Enhancement Act of 1996 and the Health Insurance Portability and Accountability Act (HIPAA), among others. With regard to SGR, this may happen again. For full background on the SGR, please refer to our Alert published on October 24.

Thursday's committee votes set the stage for consideration and votes on both the House and Senate floors in Q1 of 2014 – the closest both chambers have come to passing permanent SGR replacement legislation. Another key victory for physician groups came in the form of a budget deal negotiated by Republican Paul Ryan, Chairman of the House Budget Committee and Senator Patty Murray, Chairwoman of the Senate Budget Committee.

The agreement, which raises the top-line spending level from $967 billion to $1.012 trillion in 2014 and from $995 billion to $1.014 trillion in 2015, contained a provision that implements a 3 month delay to the SGR cut scheduled to take effect on January 1, 2014. The budget bill containing the SGR "patch" was passed overwhelmingly in the House and is expected to pass the Senate this week, giving legislators enough time in the coming months to work out final details and come to a consensus on provisions to pay what is at minimum a $116.5 billion price tag for full repeal of the current physician payment formula.

At the moment, it is not clear how the Senate and House will reconcile their respective, and divergent, versions of SGR repeal legislation, setting the stage for a showdown between the two bodies, as distinct from what has been the more common type of divisions (especially in recent years) between Republicans and Democrats in each chamber. Significant differences have emerged between the House and the Senate even though both committees started with the same jointly written legislation. We note some of the main differences below:

House Ways & Means Committee

  • Sets 0.5% pay increase for 3 years.
  • Does not include Medicare "extenders." – "Medicare extenders" encompass reauthorizations, generally on a piecemeal basis, of various components of the Medicare program.
  • Includes a Value-Based Performance Approach.
  • Includes Medical Malpractice Protection.
  • No Amendments were permitted.

Senate Finance Committee

  • Maintains flat payment, with no set increase.
  • Includes a number of Medicare "extenders." – For example: Work Geographic Adjustment, Payment for Outpatient Therapy, Quality Measure Endorsement and Selection.
  • No Medical Malpractice language.
  • Includes Amendments and a Number of Modifications. – For example: Amendment to improve quality, and expand access to community mental health services; Amendment permitting the use of telehealth technology in Alternative Payment Models (APMs), regardless of location of health care professional and Medicare beneficiary; Amendment providing additional technical assistance to Small Rural Practices in the Value Based Performance (VBP) Program.

The House Ways & Means Committee included the 0.5% payment increase in response to objections from a number of physician clinical societies, led by the American College of Surgeons, that had voiced opposition to the SGR replacement bill without such an increase. The Senate Finance version does not provide for any increase in physician payment rates and therefore is likely to continue to face opposition from some specialty physician groups.

Ultimately, there are at least three issues lawmakers need to solve to pass any permanent SGR replacement legislation:

  1. How to pay for the proposal? To fund a full repeal of the SGR, lawmakers will have to propose and successfully pass at least $116.5 billion in pay-fors, possibly cutting reimbursement in other sectors of the health care industry – this will be quite contentious and is a significant hurdle to a final end game. They may also have to seek to quantify savings from implementing more quality- and outcome-based performance initiatives in lieu of the SGR methodology.
  2. How to reconcile the Senate and House versions? Members of Congress will ultimately have to work together to reconcile differences in their respective legislative proposals and approve a consensus bill.
  3. How to ensure stakeholder support? Stakeholders such as physician groups seeking important provisions like Medicare extenders or other relevant provisions, including offsets, will need to be satisfied sufficiently, so lawmakers are able to vote for legislation without fear of backlash.

Conclusion

The path to a permanent SGR repeal will be challenging and will require a bi-partisan, bi-cameral and multi-sector stakeholder engagement effort. Although the task is daunting, the chances for success increased substantially with last Thursday's Committee actions. We can only believe that, at the very least, the complex legislative effort to repeal and replace SGR, even if against insurmountable challenges, is worth undertaking.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Andrew J. Shin
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions