A bill brokered by House Speaker John Boehner and Senate Majority Leader Harry Reid earlier this week that would put a one-year patch on the sustainable growth rate formula, stall ICD-10 implementation, and delay inclusion of oral dialysis drugs into the ESRD payment bundle until 2024 passed the House today.

Congress needs to pass final legislation on delaying the SGR by March 31, or Medicare physicians will face a 24% cut in pay. The one-year patch will give Congress more time to fine-tune a proposal in progress that has both House and Senate support. That plan would keep physician payments steady over the next decade with slight increases and calls for a long-term "pay-for-performance" approach based on a set of quality measures. Those measures have not bee finalized––nor a means of covering the $138 billion cost over the next decade to administer the new payment system.


Related: Inspector General says Medicare is 'inaccurate' in determining ESRD drug pricing


The House bill, HR 4372, "Protecting Access to Medicare," can be voted on directly by the Senate, or they can debate a similar bill introduced earlier in the week. The Senate bill, S 2157, introduced by Sen. Ron Wyden, D-Ore., on March 25, does not include the ESRD provisions, but they can be added in the final bill during conference. The bill does call for a delay in implementing ICD-10 for one year.

Both SGR bills are broad and address a host of health care related issues, such as providing funding for developing quality measures, special studies, including hospital readmission rates among nursing home patients, pediatric care initiatives, and others. Both bills also include a provision which would give hospitals until March 2015 to comply with a controversial new inpatient payment rule for hospitals known as the two midnight rule.

The Congressional Budget Office has not yet released an analysis of the legislation. But the one-year patch is expected to cost roughly $20 billion. A significant chunk of that money will be generated through a budget gimmick, according to an article in Modern Healthcare: extending sequester cuts beyond the 10-year window used for budget scoring purposes.

The Senate bill does include some proposals that will reduce spending, including achieving roughly $4 billion in savings by extending the Medicaid Disproportionate-Share Hospital payments that were part of the Patient Protection and Affordable Care Act. In addition, it sets up a program whereby doctors who order a disproportionately large number of imaging tests for Medicare patients will be required to get advance approval for those tests.

ESRD provisions

The House bill calls for a delay of inclusion of oral medications with non-IV equivalent into the ESRD payment bundle for another eight years – until 2024. That’s a 10-year delay from the original plan by the Centers for Medicare and Medicaid Services to include all ESRD drugs in the bundle by January 2014.

The bill also adds provisions that would ease the 12% cut to the bundled payment CMS imposed on dialysis providers last November and that took effect Jan. 1. CMS took a 3.3% cut each for 2014 and 2015, but told clinics it would use some accounting techniques to keep the bundle neutral for those two years––including no increase from the yearly market basket review. Under the House bill, Congress would extend that formula and reduce the ESRD market basket update by 1.25% in 2016 and 2017 and 1% in 2018 to help pay for the cost of the cut.