Senate Votes to Delay SGR, ICD-10 by 1 Year

Mark Crane

March 31, 2014

The US Senate has voted for a 1-year "doc fix" preventing a 24% pay cut for physicians who treat Medicare patients, while also delaying by 1 year the implementation of the nationwide conversion to the International Classification of Diseases, 10th Revision (ICD-10), set of diagnostic and procedural codes that was scheduled to occur on October 1.

The bill now awaits President Obama's signature.

The measure came over the strong objections to the delay of a permanent fix of the sustainable growth rate (SGR) formula by leading physician groups, before the House of Representatives passed the 1-year "doc fix" last Thursday.

But regarding the ICD-10 implementation, leading medical groups including the American Medical Association (AMA), the American Academy of Family Physicians (AAFP), and Medical Group Management Association favor a delay of the codes because they are worried the healthcare industry will not be ready by that time.

There was strong bipartisan support in both the House and Senate to repeal the SGR, the unpopular formula for physician payments. Both houses had passed their own version of a repeal, but there was little agreement on how to pay for the fix.

House Speaker John Boehner (R-OH) said at a news conference March 26 that he worked out a deal with Senate Majority Leader Harry Reid (D-NV) on a 12-month patch. "That does not preclude any work from being done on the long-term fix in terms of how we pay doctors," he said. "I think we need to take this step first."

The AMA had urged legislators to vote against the short-term fix. "Full repeal of the [SGR] formula is the answer to strengthening the Medicare program, not another patch," AMA President Ardis Dee Hoven, MD, said in a statement. The short-term fix would "undermine future passage of the permanent repeal framework.

"Further, it would perpetuate the program instability that now impedes the development and adoption of healthcare delivery and payment innovation," Dr. Hoven said.

The American College of Physicians also urged Congress to vote against the temporary fix. "We firmly believe that enactment of permanent SGR repeal and reform, this year, by this Congress, is both imperative and achievable," ACP President Molly Cooke, MD, said in a statement.

The temporary fix "would be the 17th patch enacted over 11 years to temporarily halt impending SGR cuts, at a budget cost of over $150 billion. Each time, physicians and patients were told that this time, things will be different, that the temporary patch would give Congress the time it needs to achieve agreement on permanent reform," she said. "It did not happen the past 16 patches over the past 11 years, why should physicians and patients believe that passing another patch now would result in permanent SGR repeal?"

The AAFP also condemned the temporary fix. "The AAFP deeply regrets the missed opportunity to permanently repeal a flawed Medicare formula that has plagued the health care system for more than 10 years. We urge Congressional leaders to immediately return to their bipartisan and bicameral efforts to finish the job," AAFP President Reid Blackwelder, MD, said in a statement.

The temporary fix represents "yet another instance of Congress kicking the can down the road rather than achieving meaningful, permanent reform," he said. "Congress' continuing failure to repeal the SGR perpetually threatens access to Medicare services for millions of elderly and disabled Americans and continues the cycle of expensive, temporary delays in reform to Medicare physician payment."

The American Osteopathic Association (AOS) also said the short-term fix is poor public policy. "The AOA believes that advancing yet another short-term patch would undercut the unprecedented progress that has been made toward long-term physician payment reform," AOA President Norman Vinn, DO, said in a statement. "A temporary patch through March 2015 will increase the cost of permanent repeal and place patient access to quality care in jeopardy, only to punt this longstanding problem into the next Congress."

The measure delaying the ICD-10 implementation was included in 1 sentence of the doc fix bill.

Leading physician groups favor the delay. The AMA estimates that the new diagnostic codes, which are more numerous and complex than the ones they are replacing, could cost small practices anywhere from $56,639 to $226,105, which is significantly more than in previous estimates. Roughly half this amount will reflect disrupted cash flow and lost productivity during the implementation process, according to the AMA.

The American Health Information Management Association has supported an upgrade to ICD-10. In its online newsletter, it said "another delay in ICD-10 will cost the industry money and wasted time implementing the new code set."


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