“Doc Fix” Bill Update

As you know, the United States Senate recessed for two weeks without taking up the “Doc Fix” (Sustainable Growth Rate) legislation passed by the House of Representatives late last week.  The “Doc Fix” is a recurring policy issue where the annual formula for updating physician payment under Medicare results in a significant reduction relative to current physician payment.  In order to avoid the formula driven reduction, Congress typically passes legislation “fixing” the payment to maintain current payment levels.  In order to do so, Congress must come up with the required funding, which has often lead to reduction in other provider payment updates, including nursing facility payments under Medicare.

The current effort, as approved by the House, is to permanently fix the payment system for physicians.  Some of the funding for the permanent fix is coming from reductions to the 2018 market basket update for nursing facilities, but the known one-time reduction is in lieu of the annual rate reduction “surprises” that have historically funded the temporary fixes.  

While AHCA does not believe the delayed action of the Senate places the bill in jeopardy, they are advising that the extra time gives members the opportunity to reach out to their Senators, and we certainly would suggest you do so with Senators Warner and Kaine.

However, the delay does have some logistical issues of which you should be aware.  As reported by AHCA:

A -21.2 percent adjustment would apply to the Part B fee schedule effective April 1.  However, if the SGR bill is enacted when the Senate returns from recess, this will not apply and there will be a 0.0 percent adjustment from April 1 - June 30. CMS will most likely hold processing of Part B claims for up to 14 days to avoid changing its billing systems while Congress acts.

  • To mitigate this risk, AHCA recommends that SNF operators hold any Part B claims with dates of services on or after April 1 until it is clearer what will happen in the Senate.
  • Most SNF operators typically bill on a monthly basis so that April dates of service would not be billed until May. We believe this will be sufficient time to let the legislative process proceed so that care centers will not have to change charge masters or resubmit claims, assuming the SGR bill is enacted after the Senate returns from recess in two weeks.

Technically, the therapy caps exceptions process expires on March 31 and there will be a hard $1,940 therapy cap with no exceptions. However, if the SGR bill is enacted when the Senate returns from recess, this will not apply. The problem is that until Congress acts, any therapy services furnished over the $1,940 threshold during this period of uncertainty could pose payment liability risks.

  • To mitigate this risk, AHCA recommends that SNF operators issue Advance Beneficiary Notices (ABNs) to beneficiaries needing Part B therapy services beyond the $1,940 threshold as of April 1, 2015. This notice will provide necessary beneficiary and provider payment liability protections depending on the resolution of the current SGR vote delay in the Senate.

For a more detailed explanation of these risks, please review the SGR Delay Impact on SNF Operations FAQ and share within your billing, therapy and other affected operational personnel.