CMS Urges Congress to Pass ‘Doc Fix' Legislation as Medicare Extenders Expire

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By Nathaniel Weixel

April 1 — The current patch to Medicare's sustainable growth rate formula for physician reimbursement expired April 1, along with other provisions affecting providers, including exceptions to the outpatient therapy caps, add-on payments for ambulance services, payments for low-volume hospitals and payments for Medicare-dependent hospitals.

The CMS in an April 1 notice told providers it is holding doctors' claims until April 15, but it can't stop the expiration of numerous Medicare “extenders.”

“The Administration supports bipartisan legislation that would reform the Medicare physician payment system to incentivize quality and value, help slow health care cost growth, and extend other important programs such as health care coverage for children,” the agency said in a statement.

“In the absence of such legislation, beginning April 15th, CMS will begin processing claims received on or after April 1st with a 21 percent reduction in the physician's rate to limit the impact on Medicare providers and beneficiaries.”

Additionally, a CMS official said because the agency has an obligation to make sure physicians are paid for services furnished, “starting on April 15, we will begin to process claims at the 21 percent lower payment rate if the law is not changed.” Any delay in processing claims beyond April 15 “would negatively impact providers' cash flow,” the official said.

The Senate failed to vote on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, H.R. 2) that would permanently repeal and replace the SGR before leaving on a two-week recess. 

The legislation, which overwhelmingly passed the House, would also continue funding for all of the Medicare provider extenders included in the Protecting Access to Medicare Act of 2014 (PAMA, the most recent SGR patch). Senate leaders said they expect to vote on the bill shortly after reconvening the week of April 13.

The agency said it will notify providers on or before April 11 with more information.

The agency reminded providers that claims for services furnished on or before March 31 aren't affected by the payment cut and will be processed and paid under normal time frames.

“We are working to limit any impact to Medicare providers and beneficiaries as much as possible,” it said.

Therapy Caps

Among the expiring extenders are therapy caps for Part B services. Currently, Medicare imposes annual limits on the amount of expenses a patient can accrue for outpatient therapy in a certain year.

In 2006, Congress set up a process for providers to seek waivers on the caps based on a patient's medical needs. The policy, which has been extended a number of times throughout the years, was last extended to March 31, 2015.

The SGR repeal bill would extend the therapy cap exceptions process until Jan. 1, 2018, and reform the process of medical manual review to help support the integrity of the Medicare program.

Dan Ciolek, senior director, therapy advocacy at the American Health Care Association, said in a statement to Bloomberg BNA that the delay “creates uncertainty for the industry, beneficiaries and caregivers until Congress resolves this. There could be negative consequences for people until Congress acts.”

For example, he said individuals may decide to forgo necessary therapy if they have to pay out-of-pocket above the $1,940 cap threshold.

“If providers decide to do nothing and continue to treat beneficiaries for services above this amount, they run the risk of not being paid if the bill does not pass,” Ciolek said.

“Unless providers issue an advance beneficiary notice (ABN) indicating that Medicare will not be paying for the services above the threshold, then the provider takes the liability,” he said. “Even for a short term, this is a real beneficiary access problem as beneficiaries are now placed in a position to make the decision whether to discontinue necessary therapy for a few weeks until after the legislative delay.”

Low-Volume Hospitals, RACs

Another expiring extension concerns payments for low-volume hospitals and Medicare-dependent hospitals. According to the CMS, the Affordable Care Act and subsequent legislation made temporary changes to the low-volume hospital payment adjustment for hospitals that meet certain discharge and mileage criteria.

The Medicare Dependent Hospital program also provides enhanced payment to support small, rural hospitals for which Medicare patients make up a significant percentage of inpatient days or discharges. Those temporary changes to the low-volume hospital adjustment and the Medicare Dependent Hospital provision expired April 1.

The CMS traditionally has provided an additional payment to hospitals for the higher costs associated with operating a hospital with a low volume of discharges. The SGR replacement bill would extend the special add-on payments until Oct. 1, 2017.

The CMS also announced an extension through April 30 of the prohibition on Recovery Audit Contractor (RAC) inpatient hospital patient status reviews under the “two-midnight” policy. The current statutory prohibition expired March 31. MACRA would extend the partial enforcement delay of the two-midnight policy through Oct. 1.

To contact the reporter on this story: Nathaniel Weixel in Washington at nweixel@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com