SGR Repeal – A new path forward!

sgr repeal

One factor of reimbursment that highly concerned Healthcare Providers and Facilities was the SGR (Sustainable Growth Rate) payment cut proposal. However, it took a complete rollback when the US senate passed the SGR repeal bill on Apr 14, 2015. Hereafter, Providers need not bother about the SGR rate cut, which kept increasing every year and mounted to 21% at the beginning of this year. Following the complete repeal, they can carry out their medical billing and collections without any hindrance or fear about the SGR payment cut proposal. Let us discuss about the SGR repeal further:

An Insight:

  • While Providers and Healthcare Facilities already had too much on their plates like the ICD-10 medical coding transition and more reforms associated with the PPACA, the SGR payment cut proposal came as a huge threat.
  • The rate cut kept increasing each year since its proposal in 2003. However, it never came into effect due to continuous postponements annually and that gave interim relief to Providers each year.
  • Although the SGR rate cut got postponed every year like a common ritual, Providers always had the fear that there will be a 21% cut to their Medicare payments if it came into effect. Their main concerns were that the medical claims management would get affected badly and impact the normal cash flow.

The Bipartisan Budget Act:  Analyzing the fact that Providers would suffer a lot if the 21% SGR payment cut comes into effect, the Congress introduced the Bipartisan legislation on Feb 6, 2014. This act demanded for the repeal of the SGR proposal and creation of new payment structures instead. The congress believed that, this way, Providers could give quality patient care and help suppress the rising healthcare costs. The act also stated that there will be a 0.5% increase to the Provider payments for the next 5 years.

The SGR Repeal:

  • As Providers wished, the SGR repeal was passed by the US senate on April, 14th  this year with a majority of 92 to 8 votes. President Barack Obama has signed this bill into law in the next few days, in effect enacting the legislation.
  • The bill’s most important feature is the transition of fee-for-service model to the provision of value-based healthcare services.
  • On participating in advanced value-based payment models, Providers will enjoy a 0.5% increase to their reimbursements from July 2015 through 2019.
  • All the value-based payment programs currently in use will be collaborated to work under the new ‘Merit-Based Incentive Payment System’.

Thus, the SGR repeal has brought a great relief to Providers. However, they will have to prove themselves by providing the best quality care for high incentives. Outsourcing medical billing and collections can help them achieve their goals without the nuances of new changes becoming a hindrance of learning for their billing teams.
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