Sustainable Growth Rate (SGR) Limitation on Medicare Physician Reimbursements Repealed

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.”