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Congress Scraps SGR Formula

President Obama is expected to sign into law the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) after the Senate last week voted 92-8 to pass the measure. The House approved the bill on March 26.

Compensating Physicians
MACRA supplants the Medicare Sustainable Growth Rate (“SGR”) formula for physician reimbursement. Rather than the 21 percent cuts to physician payments scheduled to take effect on April 15 under SGR, which linked Medicare doctor payouts to increases in the gross domestic product, MACRA instead annually increases Medicare physician reimbursement .5 percent from 2015 through 2019. The first adjustment begins July 1, 2015, with updates on January 1 of each successive year.

The pending law also clears any roadblocks to the October 1, 2015, implementation deadline of ICD-10 (International Classification of Disease, tenth revision), the coding system created by the World Health Organization in 1992 that notes medical records, including diseases, symptoms, abnormal findings, external causes of injury or diseases, complaints and social circumstances.

MACRA Provisions
Other components of MACRA include:

  • Incentives to health care providers in the form of a 5 percent bonus to participate in alternative payment models (“APM”), such as accountable care organizations (“ACO”) from 2019-2024;
  • Extension of the Children’s Health Insurance Program;
  • Extension of Community Health Center funding—scheduled to end in September—by two years;
  • Qualified Individual program, which assists low-income seniors in meeting Medicare Part B premium costs, is made permanent;
  • Transitional Medical Assistance, which helps low-income, families maintain health care coverage as they re-enter the workforce, is made permanent.

For more information, please contact your personal Edelstein professional.