Now that the SGR is gone... what’s next?

You may recall that the public couldn’t learn what was in “Obamacare” until the bill was passed. With the recent passing of the bill to do away with the Medicare Sustainable Growth Rate (SGR), the bill was available for review, but none of us probably paid very much attention because we were so desperate to eliminate the annual threat of draconian reimbursement cuts.

On April 16, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015, which immediately repealed the SGR retroactive to April 1, 2015. It sets into motion a transition from traditional fee-for-service (FFS) payments by Medicare to a new value-based or quality-based payment model that will be fully in place by 2019.

This bill will transition Medicare fee-for-service payments toward a value-based payment system and will incentivize the development of new value-based payment models. The bill also extends funding for the Children’s Health Insurance Program (CHIP) for two years – through Sept. 30, 2017.

Before fully transitioning to new payment models, there will be a period of relative stability and predictability to Medicare payments. Later this year, on July 1, Medicare fees will be increased by 0.5 percent. After that, on Jan. 1 for the next four years, the conversion factor will be automatically adjusted upwards by 0.5 percent. These increases are automatic and will not require any additional action by Congress to take effect.

However, separate from this automatic update process, Medicare (CMS) will continue to make periodic adjustments to individual relative value units (RVUs) of CPT codes, reflecting changes in work, overhead or malpractice costs. The Advocacy Council expects, at the very least, this will impact allergy with a mandated review of RVUs for CPT codes 95004 and 95165. This will mean that we will be surveying you to determine whether changes should be made in reimbursement for physician work. More about this in an upcoming Advocacy Insider.

Advocacy Issue: 
Billing, Coding & Payments