The U.S. House of Representatives on March 26 easily passed legislation to repeal and replace the Medicare Sustainable Growth Rate reimbursement mechanism for physicians. The bill did not include language to extend the ICD-10 deadline, as the Rules Committee report to the House floor forbid the adoption of amendments.

The Senate surprisingly did not consider the bill before leaving for a two-week recess. Because Medicare takes about 14 days to pay claims, physicians may not see much of a change in reimbursement if the Senate quickly takes up the SGR after the recess, says Jeff Smith, vice president of public policy at the College of Healthcare Information Management Executives.

Also See: New Program Accelerates Move to Value-Based Care Payments

House members clearly wanted to be done with the annual fights over the SGR, and debate on the bill was cordial enough to be termed a love-fest, with members on both sides of the aisle hoping that passage would pave the way to some new level of bi-partisanship cooperation.  Multiple physician members of the chamber spoke in favor of the bill and never mentioned ICD-10. “Mr. Speaker, it is time for us to end SGR, let us never speak of this issue again,” said Rep. Michael Burgess, M.D., (R-Tex.), the floor manager of the legislation.

The new replacement reimbursement arrangement will give physicians a 0.5 percent annual payment increase for the next five years, with value-based payments starting after that time. The bill further delays enforcement of the “two-midnight rule” for hospital payments until Sept. 30, 2015. It also expands funding for the Children’s Health Insurance Program and community health centers.

The legislation also has substantial new policies affecting health information technology:

* Language in the bill includes a national objective that interoperable electronic health records be nationwide by the end of 2018, including providers possibly attesting that they are not disabling EHR functions to limit interoperability. Further, the Department of Health and Human Services would establish metrics to track progress toward interoperability and would examine the feasibility of developing a program to aid providers in comparing and selecting certified EHRs.

* The legislation also incorporates reporting for meaningful use, value-based modifiers, the physician quality reporting system, and a new report on resource use into a single new reporting program called the Merit-Based Incentive Payment System, or MIPS. The resource use reporting would enable physicians to report their role in treating a beneficiary, says Jennifer Pollack, a government affairs representative at the Medical Group Management Association.

* EHR meaningful use penalties would sunset at the end of 2018. However, MIPS, which is a proposed new program that has not yet been designed, could include payment adjustments (penalties) for programs within MIPS, which may include further stages of meaningful use.

The Medical Group Management Association, American Medical Association, American Hospital Association and Coalition for ICD-10 quickly issued statements applauding House approval of the SGR bill and urging quick Senate passage.

The Medicare Rights Center also voiced approval but called on the Senate to make improvements. “This step in the right direction comes at a steep cost, asking too much from Medicare beneficiaries in return for too little. H.R. 2 gives pay raises to doctors, while shifting $30 billion in higher costs to some beneficiaries and granting a small measure of security to low-income seniors and people with disabilities. This security afforded to low-income beneficiaries through a permanent Qualified Individual program should be celebrated, but Congress can and should do better.”

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