Legal

POLICY: House Passes Permanent Medicare ‘Doc Fix’

By Daniel Wilson

aw360, Washington (March 26, 2015, 12:43 PM ET) — The U.S. House of Representatives on Thursday passed a bill intended to put in place a permanent “doc fix” to replace Medicare’s unpopular physician reimbursement system, commonly overridden by lawmakers each year.

H.R. 2, the Medicare Access and CHIP Reauthorization Act, passed in a 392-37 vote, with many Democratic lawmakers joining the bulk of House Republicans in supporting the bill after several lawmakers from each party spoke in favor of the legislation on the House floor Thursday.

“We’ve patched this problem 17 times,” House Speaker John Boehner, R-Ohio, said. “I decided about a year ago we’d had enough of it. In its place, we will deliver for the American people the first real entitlement reform in nearly two decades. This is good news for America’s seniors, who will benefit from a more stable and reliable system for seeing their doctor.”

Under the bill, Medicare’s current sustainable growth rate formula, or SGR, would be permanently repealed. Instead, Medicare doctor pay would rise by 0.5 percent each year between 2015 and 2019, beginning in July.

Payments will then be held at the 2019 rate through 2025, but physicians and other health professionals will be eligible for merit-based bonus payments based on factors such as meaningful usage of electronic health record systems and their use of care models that emphasize quality over volume.

From 2026 onward, medical professionals who use certain alternative payment systems will receive a 1 percent annual increase in their Medicare payment rates, with others seeing 0.5 percent annual increases.

The SGR is a measure meant to tie increases in Medicare reimbursements to inflation, designed to avoid runaway cost increases. But the formula has been routinely overridden for almost two decades, through enactment of an annual “doc fix” — usually at the last minute — with lawmakers generally arguing that keeping to the SGR rates would cause many doctors to refuse Medicare patients, threatening access to care for seniors.

Over time, the gap between the specified rate under the SGR and the actual Medicare payment rate has grown amid this long pattern of temporary fixes. If a doc fix is not signed into law this year, doctors would see their Medicare reimbursement rate drop by 21 percent.

In addition to the doc fix section of the bill, the legislation also includes a collection of measures to both relax and strengthen various aspects of anti-fraud oversight under Medicare and would extend both the Children’s Health Insurance Program, or CHIP, and certain funding for community health centers for an additional two years.

To help offset the expected cost of the bill, pegged at more than $210 billion, House Democratic lawmakers agreed to a number of other Medicare changes, including tweaks to make supplemental Medigap plans less generous starting in 2020, and requiring certain high-income seniors to pay higher premiums for doctor and outpatient care and prescription drug coverage.

Their Democratic counterparts in the Senate have offered the bill qualified support, indicating they may push for a longer extension on CHIP funding and look to tweak some aspects of the legislation, such as the inclusion of the so-called Hyde Amendment  — used to bar federal funds from being used to fund abortion — for community health center funding, the same clause that has seen an otherwise uncontroversial anti-sex trafficking bill stall.

The White House has indicated it will support the bill in its current form, backing up President Barack Obama’s measured support with a policy statement Wednesday saying it believed the reforms in the bill were “sensible.”

“H.R. 2 … would reform the flawed Medicare physician payment system to incentivize quality and value — a proposal called for in the President’s Fiscal Year 2016 Budget — would make reforms that could help slow health care cost growth, and would extend other important programs such as health care coverage for children,” it said.

–Additional reporting by Jeff Overley. Editing by Rebecca Flanagan.

SOURCE: Law360; http://www.law360.com/health/articles/635997?nl_pk=3bb88069-ba14-4801-9724-bb402b141432&utm_source=newsletter&utm_medium=email&utm_campaign=health

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