Last week, the U.S. House of Representatives overwhelmingly voted 392-37 to approve the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2), a bill that would, among other things, permanently replace the sustainable growth rate (SGR) formula.  The proposed bill would increase Medicare physician payments 0.5% each year from 2015 through 2019 and maintain the 2019 rates through 2025.  In 2019, the bill gives Medicare participating physicians the opportunity to participate in a merit-based incentive program focusing on quality.  Beginning in 2026, physicians taking part in alternative payment models that meet certain requirements would receive annual updates of .75 percent, while non-participating providers would receive annual updates of 0.25 percent.

The bipartisan bill, which President Obama has said he will sign, has been sent to the Senate for a vote.  Senate Majority Leader Mitch McConnell expects the bill to pass the Senate with a large majority.  However, the Senate has adjourned for a two-week recess and will not vote on the bill until the chamber returns from the recess on April 13.  An analysis of the bill by the Congressional Budget Office indicated that enacting the bill would increase direct spending by about $145 billion and revenues by about $4 billion, resulting in a $141 billion increase in federal budget deficits.

The current SGR patch expires tomorrow (March 31) and will result in a 21% cut in Medicare physician payments for Medicare patients treated starting April 1.  CMS indicated that it “must take steps to implement the negative update.”  Noting that electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt, CMS said it would notify providers on or before April 11 as to next steps.  CMS’s notice is available here.  A summary of the bill can be found here.  

Reporter, Christina A. Gonzalez, Houston, +1 713 276 7340, cagonzalez@kslaw.com.