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Michael Petruzzelli

, National Council for Behavioral Health

Medicare Physician Payment Reform Passes Senate, Now Moves to White House

April 15, 2015 | Medicare | Comments
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Legislation to reform the Medicare physician payment formula overwhelmingly passed the Senate last night and now heads to the White House where it is expected to be signed by President Obama. The signing of this legislation will stave off looming 21 percent cuts to physician reimbursements and end a perennial headache for legislators and providers alike.

The legislation – first passed by the House late last month – will repeal the current physician payment formula, known as the Sustainable Growth Rate, and replace it with one that links reimbursement in part to the quality of care provided. Highlights of the approved legislation include:

  • Providing a 5-year period of 0.5% updates under the Physician Fee Schedule;
  • Consolidating three existing incentive programs into one Merit-Based Incentive Payment System (MIPS). These programs – sunsetting on the last day of 2018 – include the electronic health record incentive program; the quality reporting incentive program, PQRS; and the value-based payment modifier;
  • Incorporating incentives for alternative payment models (APMs), such as a 5% bonus to providers receiving a significant portion of revenue from APMs;
  • Extending funding for the Children’s Health Insurance Program through fiscal year 2017; and
  • Extending permanently the Medicare Qualifying Individual program to assist Medicare beneficiaries in paying Part B premiums.

“Finally, after a decade of trying, we have a bipartisan bill that will permanently repeal the flawed SGR and move Medicare to a health care system based on quality and efficiency, that is good for seniors and doctors alike.” said Energy and Commerce Committee Ranking Member Frank Pallone (D-NJ) last month after the House passed the measure.

“If we can pass this bill tonight, it will be a major, major accomplishment,” Senator Orrin Hatch (R-UT), chairman of the Finance Committee, said shortly before the bill’s passage. “It will put in place much needed reforms to the Medicare program — something that hasn’t happened in a long time.”

In a release on Wednesday, CMS confirmed that providers would not see any cuts to reimbursement payments. Additionally, exceptions to the therapy cap, add-on payments for ambulance services, payments for low volume hospitals, and payments for Medicare dependent hospitals have all been extended.