Is anyone happy about the SGR fix and ICD-10 delay?

It's been quite a couple of weeks for the healthcare industry.

In case you missed the news, in lightning speed, Congress approved a temporary fix to the sustainable growth rate, a formula that determines how much the government pays physicians who treat Medicare patients. In essence, the bill--quietly signed by President Barack Obama into law on Tuesday--averted a 24 percent pay cut to Medicare payments for doctors.

Perhaps at another time this would be welcome news. In fact, over the years Congress has approved a short-term fix to the SGR multiple times (17 counting this week's decision). And though physician groups would have preferred a permanent solution, they appeared relatively satisfied with the one-year delays--up to now.

This year doctors wanted nothing to do with another patch and even said they'd take the 24 percent pay cut if it meant that Congress would repeal the SGR once and for all. A deal was already in place--one that both House and Republicans could live with and the end to the hated payment formula seemed likely. That is until someone thought it would be great to lump the SGR with a delay in the Affordable Care Act's mandate requiring all individuals to obtain health insurance.

And then there was the small matter of how to pay for the repeal. Estimated costs to repeal the SGR continue to climb--currently the Congressional Budget Office projects it will cost $180 billion.

So knowing that the bipartisan deal to permanently repeal the SGR wouldn't fly with its tie to the ACA and the lingering questions over the cost, Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio) quietly worked on a new version of the bill: a temporary one that now included a delay to the implementation of ICD-10 as well as two other controversial healthcare issues--the two-midnight rule and recovery audits of medically unnecessary claims.

Wait. What? How did ICD-10 suddenly enter the mix? The move to the new code set has been in the works for years and has already been delayed by a year once before. And the Centers for Medicare & Medicaid Services was adamant that there would be no more delays. And since the switch to ICD-10 was a mere six months away, why would it suddenly screech to a halt?

As my colleague Dan Bowman recently noted, the ICD-10 delay didn't mean much to lawmakers. In fact, the Senate didn't bring it up once in the hours leading to its vote Monday to approve the bill. And that's probably because lawmakers know that the general public doesn't really understand what ICD-9 codes are, let alone care about the need to move to a new, more specific coding system.

But they do understand Medicare and the fact that if doctors have to take a pay cut they may no longer accept those patients, most of whom are elderly. And those constituents vote--and will likely vote those lawmakers back into office knowing their representatives and senators have their best interests at heart.

The ICD-10 delay is terrible news for the hospitals and systems that have spent significant amounts of time and money preparing for the new code set. Not so much for physician practices, who according to recent surveys aren't anywhere near ready for the transition to ICD-10. Part of that reason is the cost--money many practices say they don't have. Depending on the size of the organization, the cost of implementing ICD-10 ranges anywhere from $56,649 for a small practice  to $8 million for a large practice.

So the bill approved this week is a mixed blessing for doctors. The failure to permanently repeal the SGR was a blow, but the ICD-10 delay was likely welcome news.

This year trade groups representing physicians will work to resolve both issues. They'll lobby for a bill to permanently repeal the SGR that includes a mechanism to pay for it. And apparently they'll try to negotiate a new compliance date for ICD-10.

Robert Tennant, senior policy advisor to the Medical Group Management Association told Medscape Medical News this week that there is a lot of support among physician practices to revisit ICD-10 and the implementation date. The delay, he said, is an opportunity to work out a new approach with CMS that may allow different industry sectors to transition to the new code set at different times. -Ilene (@FierceHealth)

 

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