Sustainable Growth Rate (SGR) Limitation on Medicare Physician Reimbursements Repealed

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On April 14, Congress passed H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015.  Acknowledging the “bipartisan achievement, it was signed into law by the President in a “Rose Garden” ceremony late in the day on April 16, 2015. Common “doc-fixes” will no longer be necessary under the new law.

Most importantly, for the period from July 1 through December 31, 2015, the law increases physician payments by 0.5 percent and then annually thereafter beginning in 2016 through 2019.  However, beginning in 2020 and running through 2025, it appears that no increases are scheduled.  Then, starting in 2026, increases will be based upon two conversion factors:
  • One applies to physicians who have met the combined requirements for meaningful use of electronic health records, quality reporting, and alternative payment models (“APM”), and, 
  • The other applies to physicians who have not met the APM requirements.  Physicians qualifying for APM treatment will receive a 0.75 percent update, while all others will receive a 0.25 percent increase.
As might be expected, certain other Medicare provisions are addressed and it delays the so-called “two midnight rule” until September 30, 2015.   Two of the several expiring Medicare provisions addressed are: special payments or adjustments to Medicare-dependent hospitals and low-volume hospitals; and funding for development of quality measures.Among some of the other noteworthy provisions addresses enforcement of the “two-midnight rule” concerning inpatient hospital services which is delayed until September 30, 2015 and Medicaid benefits for certain “qualified individuals” is now made permanent as is the “transitional medical assistance program.” 

Update To Inpatient Rehab Facility Rates And Quality Measures

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On April 27, 2015 CMS released the proposed 2016 payment and policy rule for Medicare inpatient rehabilitation facilities (“IRFs”).  Here are the key points from the proposed rule:
  • Update the IRF federal prospective payment rates to use updated FY 2014 IRF claims and the most recent available IRF cost report data.

  • Adopt an IRF-specific market basket that will be used to determine the market basket update and labor-related share.  This IRF-specific market basket will reflect the cost structures of only IRF providers.

  • Phase in the revised wage index changes.

  • Revise and update quality measures and reporting requirements under the IRF QRP.



The updated payment rates will be effective  for discharges occurring on or after October 1, 2015.  CMS estimates that the net revenue impact of the proposed rule on all IRFs is to increase estimated payments by approximately 1.7%. 

The Affordable Care Act established the quality reporting program for IRFs and requires a 2% reduction of the applicable market basket increase factor for IRFs that fail to comply with the quality data submission requirements.    The following are the quality measures previously finalized and currently used in the IRF quality reporting program.  These will affect FY 2017 adjustments to the IRF PPS Annual Increase Factor and Subsequent Year Increase Factors:

NQF Measure ID
Quality Measure Title
Data Submission Mechanism
NQF #0138
National Health Safety Network (NHSN) Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure.
CDC NHSN
NQF #0431
Influenza Vaccination Coverage among Healthcare Personnel
CDC NHSN.
NQF #0680
Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short-Stay).
IRF-PAI.

NQF #0678
Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short-Stay)
IRF-PAI
NQF #2502
All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from Inpatient Rehabilitation Facilities.
Claims-based
NQF #1716
National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure.
CDC NHSN.
NQF #1717
National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Clostridium difficile Infection (CDI) Outcome Measure.
CDC NHSN.


The Proposed Rule re-proposes  the following quality measures for the FY 2018 payment determination and subsequent years:
  1. Quality Measure To Reflect NQF Endorsement: All-Cause Unplanned Readmission Measure for 30 Days Post Discharge From IRFs (NQF #2502).   CMS proposes to adopt this measure for the FY 2018 payment determination and subsequent years to reflect that it is NQF-endorsed for use in the IRF setting as of December 2014.
  2. Quality Measure Addressing the Domain of Skin Integrity and Changes in Skin Integrity: Percent of Residents or Patients With Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678)
CMS also proposes to adopt 6 new quality measures beginning with the FY 2018 payment
determination.
  1. Quality Measure Addressing the Domain of the Incidence of Major Falls: An application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674);
  2. Quality Measure Addressing the Domain of Functional Status, Cognitive Function, and Changes in Function and Cognitive Function: Application of Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; under review);
  3. IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients (NQF #2633; under review);
  4. IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients (NQF #2634; under review);
  5. IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients (NQF #2635; under review);
  6. IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients (NQF #2636; under review).
CMS intends to publicly report some of the quality data for rehabilitation facilities beginning in fall 2016. However, before the quality data's release, facilities will have an opportunity to review and correct information.

Public comments will be accepted until June 22, 2015.  The proposed rule can be viewed here: http://www.gpo.gov/fdsys/pkg/FR-2015-04-27/pdf/2015-09617.pdf

Please contact Brian Heaton at bheaton@kdlegal.com or Meghan McNab at mmcnab@kdlegal.com if you have any questions.