SGR Repeal Bill Faces Possible Minefield in Senate

April 13, 2015

For sheer drama, few things top Congressional deliberations on Medicare's sustainable growth rate (SGR) formula for setting physician pay. The acronym SGR could be the title of a television crime series such as "NCIS" or "CSI," with all the crazy plot twists that give viewers the jitters.

Physicians are rightfully nervous about the latest episode of the long-running SGR show.

The formula was set to trigger a 21% rate reduction on April 1, but the normally fractious House on March 26 passed a bipartisan bill in a resounding 392 to 37 vote that repealed the SGR legislation and shifted Medicare reimbursement from fee-for-service to pay-for-performance. Organized medicine was euphoric. Now it was up to the Senate to do its part before April 1.

Not so fast, said Senate Majority Leader Mitch McConnell (R-KY). McConnell thought it best to delay deliberations on the SGR repeal bill, dubbed the Medicare Access and CHIP Reauthorization Act (MACRA), until April 13, when the Senate returned from its spring break. That postponement meant that the 21% pay cut technically took effect on April 1 for all services rendered after March 31. However, the Centers for Medicare and Medicaid Services (CMS) routinely waits 14 calendar days before it pays an electronic claim, so physicians won't experience the rate reduction until April 15. If the Senate can pass the SGR repeal bill before that new deadline, claims for past April services would be paid at pre-April rates. No harm, no foul.

That happy ending is still possible. However, speedy approval of the SGR measure in the Senate is not guaranteed, because Democrats and Republicans there are weighing possible amendments that could prolong debate past April 14 or even kill the bill. After all, if MACRA gets amended in the Senate, it must go back to the House for another vote, which could be a thumbs-down.

And given the possibility that it could miss the new April 14 deadline, the Senate could opt for another temporary delay, or patch, of the SGR-mandated pay cut, which would be the 18th since 2003.

"It's not what we want, or what the healthcare industry wants, but it's always a possibility," said Jennifer Pollack, a government affairs representative with the Medical Group Management Association (MGMA), in an interview with Medscape Medical News. Pollack said she hopes that members of the Senate will be as compromise-minded as their House counterparts, who swallowed parts of the bill they found objectionable for the sake of the "greater good."

Like others in organized medicine, Robert Wergin, MD, president of the American Academy of Family Physicians, wants the Senate to pass MACRA as is.

"Adding amendments would slow things down and maybe even make it less likely to pass," Dr Wergin told Medscape Medical News. "It's time to lay this thing to rest."

What follows are possible amendment issues that could derail SGR repeal in the Senate.

Objections to Deficit Spending

The $214 billion bill encompasses more than overhauling Medicare reimbursement to physicians. MACRA extends the life of the Children's Health Insurance Program (CHIP) for 2 more years along with a grab bag of other healthcare spending policies that benefit select providers and research projects.

Of that $214 billion, $141 billion roughly represents the 10-year cost of repealing the SGR formula — writing off what the federal government counted on saving with the payment cut, made massive by dint of prior postponements. In the past, Congress tried to offset the cost of SGR repeal to avoid deficit spending but couldn't agree on how.

This year's repeal bill sailed through the GOP-controlled House because Democrats and Republicans agreed that this SGR "debt" was essentially uncollectable and a budget illusion they could ignore. Past SGR patches have made it clear, after all, that Congress would never let physicians feel this Medicare ax, lest they abandon the program and leave seniors in a lurch. MACRA, therefore, stipulates offsets for only $73 billion worth of the total cost and lets the remaining $141 billion ride.

However, some Republican senators, such as Sen. Ben Sasse (R-NE) and Sen. Jeff Sessions (R-AL), say adding $141 billion to the deficit is irresponsible. Sessions, for one, proposed on the Senate floor last month that his colleagues ought to approve another short-term postponement of the 21% cut to buy time for crafting a "permanent fix, one that is responsible, one that is grown- up, one that is paid for."

Senate budget hawks could attempt a legislative gambit that gets the repeal bill quickly passed without making them look like spendthrifts. They could excise a provision in MACRA that exempts it from the federal "pay-as-you-go" or "pay-go" law requiring a dollar in offsets for every new dollar spent. By passing the bill without the pay-go clause, Congress then would be obliged to find offsets before year's end or risk an across-the-board budget cut that would max out at 4% for Medicare spending — for physician services, among other things.

Of course, none of this would play out unless the House approved the Senate amendment, which could be a long shot, given how that chamber gave up on offsetting the $141 billion.

More Flies in the Ointment

Other issues besides deficit spending could trigger amendments to the SGR repeal bill before the Senate.

CHIP extension: Many Senate Democrats want to fund CHIP for 4 more years, not just 2. Without a fresh infusion of cash, the program will expire on September 30.

Medicare caps on therapy services: Medicare limits how much it will spend on physical, occupational, and speech therapy. Sen. Ben Cardin (D-MD) and others contend that these caps deprive seniors of much needed care. A spokesperson for Cardin said the senator hopes to "offer an amendment to repeal these arbitrary therapy caps when the Senate considers the SGR bill," according to the online publication Morning Consult.

Antiabortion language: MACRA contains boilerplate language attached to many bills that bars the use of federal funds for abortions. Pro-choice Democrats in the House, such as Minority Leader Nancy Pelosi (D-CA), looked the other way when they passed MACRA with this provision, but their counterparts in the Senate may put up a fight.

Higher costs for medicare beneficiaries: Of the $73 billion in offsets for MACRA, almost half comes from Medicare beneficiaries assuming a larger share of their healthcare costs, mostly in the form of higher part B and part D premiums for the more affluent. The powerful AARP opposes seniors paying more. It's asking members to contact their senators and urge them to "improve the bill."

It's one thing to propose an amendment. It's another thing to pass one. Some Capitol Hill observers say that the Senate leadership may allow votes on MACRA amendments for the sake of political theater — placating the sponsors, as it were — only to hope for their defeat.

"It could just be for people to show their support for their amendment," said the MGMA's Jennifer Pollack, "but ultimately, the amendment may not appear in the bill."

Meanwhile, the clock is ticking toward Wednesday, April 15, when the CMS must begin processing April claims at a 21% discount if Congress doesn't act. As one Senate Republican staffer told Medscape Medical News: "We have until Tuesday at midnight to solve this."

That's suspense.

Is a television pilot of "SGR" next?

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