We wrote in late March about the U.S. House of Representatives passing SGR legislation intended to be a permanent cure to Medicare’s “doc fix” legislation. Yesterday evening, the Senate finally passed the SGR legislation to avoid a rate cut. Congress anticipates President Obama will sign the SGR legislation into law fairly quickly. Among other measures, the SGR legislation will amend Title XVIII of the Social Security Act, pertaining to Medicare, to:

• “remove sustainable growth rate (SGR) methodology from the determination of annual conversion factors in the formula for payment for physicians’ services; and
• revise the update in rates for 2015 and subsequent years.”

Notably, the SGR legislation extends the two-midnight Medicare rule through FY2015. The two-midnight Medicare rule only provides coverage for hospital stays when a beneficiary remains in a hospital over two midnights because the beneficiary requires care over this minimum period of time. Medicare generally denies coverage for care provided during shorter length hospital stays. The SGR legislation also extends the CHIP program through FY2017.