Thursday, November 18, 2010

Update on One Month “Doc Fix”

In order to prevent the 23 percent reduction in Medicare reimbursement levels scheduled to take effect on December 1, Sens. Grassley and Baucus have reached agreement on a one-month extension of the “doc fix.” The legislation is in the process of being hotlined; if approved, it could be considered by the House (which has adjourned for the Thanksgiving break) on November 29 or 30.

The legislation extends the existing 2.2% increase in reimbursement levels (passed in June) for December 2010. The bill also stipulates that the payment increase shall be disregarded for purposes of calculating SGR rates for periods after December 31, 2010.

The approximately $1 billion cost of the SGR fix would be funded through changes to the multiple procedure payment reduction policy for therapy services. By way of background, the health care law required the Centers for Medicare and Medicaid Services (CMS) to re-adjust so-called “bundled” services – that is, multiple services delivered at the same time. As a result of that directive, CMS issued a final rule earlier this month that would reduce by 25 percent the practice component of the second and subsequent therapy services furnished by a provider to the same beneficiary on the same date. The 25 percent reduction would only apply to the practice (i.e., the “overhead”) component of the reimbursement – providers would still receive full reimbursement for the labor component of the Medicare fee.

The SGR bill would reduce the scheduled reduction in the practice component from 25 percent to 20 percent for multiple therapy procedures. However, it would also remove the budget neutrality provision in the regulation – meaning the budgetary savings would be returned to the federal government (to pay for the SGR extension), rather than reallocated to other components of the physician fee schedule.

A CBO score is available here; the line marked “total on-budget changes” indicates the legislation will cost $504 million over five years, and save $24 million over ten.


UPDATE: In case you weren’t just watching the floor, the Senate just passed by unanimous consent a 30-day patch to fix the SGR for the month of December.  As the House has completed its business for the week, that chamber can consider the measure on November 29 or 30, once it returns from the Thanksgiving break.

The Senate also just moved to proceed to the food safety bill (S. 510) on a 57-27 vote.  Senator Reid just indicated he and Senator McConnell are meeting to discuss the further disposition of the measure.  We will keep you posted with further developments on same.