Congress Passes One-Year Patch for SGR and One-Year Delay of ICD-10

April 1, 2014

Congress passed a one-year patch for the Medicare Sustainable Growth Rate (SGR) formula to postpone a 24 percent cut in Medicare payments to physicians scheduled to take effect today. Contained within the patch is a provision delaying the implementation of ICD-10 for one year. The bill is awaiting President Obama’s signature.

Most concerning for specialty physicians and surgeons is a provision used to pay for the $20 billion patch that implements severe payment cuts for services that are deemed to be ‘misvalued’ within the Medicare physician payment system. This provision is part of an effort to cut payments to specialists while increasing the value of primary care services in the Medicare program. In addition, one of the other ways the legislation was paid for was by increasing the Medicare sequester payment cut for 2024 from 2% to 4% for the first six months of the year. After six months the cut would drop to zero.

The patch was necessary because leaders in the House and Senate cannot agree on a way to pay for permanent repeal. Senate Finance Committee Chairman Ron Wyden (D-OR) hopes to pass S. 2110, legislation which would repeal the SGR and replace it with a new payment system. That new system is estimated to cost approximately $180 billion. Senate Democrats have proposed to pass the new policy either without paying for it or using Overseas Contingency (OCO) funds, while Republicans have proposed a delay or repeal of the Affordable Care Act individual mandate.

“This flawed short-term fix, funded by a devastating front-loading of already painful sequestration payment cuts, does nothing to protect the long-term interests of the Medicare program, its beneficiaries and the healthcare providers who sustain it,” said ASCA Chief Executive Officer William Prentice.

ASCA, along with every medical provider association, opposed a temporary patch and supported full repeal.