Senate OKs SGR patch, delays ICD-10

Despite physician opposition, the Senate on Monday approved a temporary patch to the sustainable growth rate (SGR) payment formula that will prevent deep Medicare payment cuts for another year and also delays the implementation of ICD-10 to October 2015 at the earliest.

The Senate voted, 64-35, to pass the bill just hours before the 24 percent cut in Medicare payments to doctors was set to take effect. The bill now requires President Barack Obama's signature.

UPDATE: Doc SGR fix signed into law

The decision came four days after a swift House vote in favor of the Band-Aid approach within a bill that also delays ICD-10 for at least another year and postpones compliance with the controversial two-midnight rule and recovery audits of medically unnecessary claims until March 15.

Although industry experts expected the Senate would likely vote in favor of the latest bill, leading doctor groups told MedPage Today that they were willing to take the deep Medicare cuts under the SGR if it would force Congress to permanently repeal the much-hated payment formula.

Physicians were disappointed by the temporary measure because just last month lawmakers announced they reached agreement on how to permanently repeal the payment formula, which determines how much the government pays physicians who treat Medicare patients. Since its implementation in 1995, Congress has deployed it only once and instead has authorized 16 short-term annual fixes to prevent the payment cuts. But the deal unraveled when lawmakers inserted language tying the bill to a delay in the Affordable Care Act's mandate requiring all individuals to obtain health insurance.  

But in a surprise move, Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio) worked together last week and released the latest bill that lumped in ICD-10, the two-midnight rule and recovery audits into another temporary fix. Both lawmakers said they hope to reach agreement on how to pay for permanent repeal of the SGR by next year. The Congressional Budget Office estimates it will cost as much as $180 billion to permanently repeal it.

Prior to the Senate vote, Reid referred to the SGR as "defective" and called on Congress to "restore sanity to the Medicare payment system;" However, he said, that given the fact that Democrats and Republicans can't agree on a permanent fix, "I'm pleased with the temporary patch and hope it's the last patch."