‘Doc Fix’ Deal Puts Home Health Payments in Jeopardy [Update]

The bill passed this week by the House of Representatives to repeal Medicare’s sustainable growth rate (SGR) formula also would have reimbursement repercussions for post-acute care providers, including home health.

The measure recently was unveiled by bipartisan leaders from the House Ways and Means as well as Energy and Commerce subcommittees; they introduced a working framework to permanently replace Medicare’s SGR formula, a budget cap passed into law in 1997 to control physician spending.

The framework builds upon H.R. 1470, known as the SGR Repeal and Medicare Provider Payment Modernization Act, which is a more than $200 billion deal devised by House Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA).

On Thursday, the House voted 392-37 in favor of the bill. The Senate did not vote on it before adjourning for a recess, but that chamber still could take it up in April.

The bill aims to replace the SGR by removing the “imminent threat of draconian cuts to Medicare providers,” instead creating a new system that moves Medicare away from a volume-based system towards one that rewards value, thus improving the quality of care for seniors, the House Energy and Commerce and House Ways and Means Committees said in a written statement.

“We can see the light at the end of the SGR tunnel—finally. Our bipartisan product begins the task of strengthening Medicare over the long term,” said Fred Upton (R-MI), chairman of the Energy and Commerce Committee, in a written statement prior to the House vote. “It’s time to put a stop once and for all to the repeated SGR crises and start to put Medicare on a stronger path forward for our seniors.”

The SGR formula is often associated with the term “doc fix” as it relates to Congress’ short-term patch to keep physician’s payments stable. If Congress doesn’t enact another “fix” by March 31, physician reimbursement from Medicare will be cut by 20%. While the Senate did not approve the permanent repeal, the Centers for Medicare & Medicaid Services still could take action to temporarily delay the cut.

Congressmen from both sides of the aisle have been lauding H.R. 1470 for its benefits to the Medicare program and the seniors it serves, but the cost would come at a price to post-acute care providers. Specifically, to help offset the cost of a permanent SGR repeal, Congress would restrict reimbursement increases scheduled in 2018 for home health providers, hospices and nursing homes to 1%.

This translates into $3.4 billion in cuts over a 10-year period of time, said William Dombi, vice president for law at the National Association for Home Care and Hospice (NAHC), which vehemently argues that new regulations could challenge providers’ abilities to provide high-quality, cost-effective care.

“And they’re permanent. They keep growing and growing,” said Dombi. “And on the hospice side, well over $2 billion of impact on payments to hospices.”

NAHC also raised concerns that the legislation would affect beneficiaries as well via increased costs for Medicare enrollment, restrictions on first-dollar payment of deductibles and copayments through Medigap policies.

The organization is currently working to address the potential cuts by either having them removed or at least moving them to a later date, Dombi said. Secondly, NAHC’s next priority within the SGR legislation is to include a two-year extension of the Medicare Home Health Rural Add-on, which is set to expire at the end of this year. And lastly, NAHC also hopes to work on including a legislative remedy to the face-to-face encounter rule in the SGR bill.

However, other post-acute care groups were more welcoming of a “doc fix,” as it would finally put an end to short-term patches and uncertainty.

Organizations such as the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) enthusiastically supported a proposal to repeal the SGR, especially as it aims to create a level of stability for health care providers.

“This is a bill the profession can get behind,” said AHCA President and CEO Mark Parkinson in a written statement. “A permanent repeal of SGR will mean a new level of certainty and stability for care providers across the country. And the needed reforms and extensions to therapy will go a long ways in helping tens of thousands of residents who rely on these therapies to return to their communities.”

Written by Jason Oliva

Jason Oliva