April 4, 2014
On March 31, the Senate followed the lead of the House of Representatives and passed the Protecting Access to Medicare Act of 2014, which was signed into law by President Obama on April 1. This represents the seventeenth time a bill has been passed to ‘patch’ the Sustainable Growth Rate for Medicare (SGR), which was originally passed in 1997. Under the SGR, Medicare payments to providers would have been reduced by roughly 24%. This ‘patch’ to the SGR has prevented the cuts to Medicare payments. While the American Medical Association and the American College of Physicians are both opposed to the SGR, they have also opposed this legislation as they have been lobbying for a permanent fix to the SGR. In an effort to gain support from these groups, the House of Representatives added some additional provisions, some key provisions include:
- Delaying the enforcement of the two-midnight rule until June of 2015;
- Delaying implementation of ICD-10 until at least October 2015;
- Amending PPACA to repeal the limitation on deductibles for employer-sponsored health plans1.
These changes will impact your revenue cycle in several ways. The delay of the two-midnight rule change until 2015, for example, will have a large impact on Recovery Audit Contractor (RAC) review of medical necessity. While the enforcement of two-midnight rule has been delayed several times, providers should take steps now to ensure they are ready for the change and avoid an increase in denials around medical necessity.