What you need to know about SGR fix and ICD-10
The long-maligned SGR formula – which would’ve instituted a 21% cut for 2015 – has been replaced with a series of automatic positive 0.5% adjustments through 2018.
That’s just the top item in the “Medicare Access and CHIP Reauthorization Act of 2015.” After 2018, the automatic positive updates will stop and physician compensation will be adjusted by a new incentive program, called the Merit-Based Incentive Payment System (MIPS). This new program is designed to consolidate the Medicare program’s existing pay-for-performance initiatives.
One of the biggest initiatives is a new modifier known as the value- based modifier (VBM), which the Affordable Care Act required CMS to begin implementing in 2015. The relationship between MIPS and the value-based modifier is complex, because MIPS doesn’t replace the VBM or the meaningful use program or the Physician Quality Reporting System (PQRS).
Instead, MIPS will measure Part B providers in four performance categories to create an overall merit score from 0 to 100. This score can significantly impact a provider’s Medicare reimbursement during a given payment year. Note: It’s not clear exactly when CMS will begin collecting performance data to generate MIPS scores, but the first MIPS payment year will be 2019.
With just five months remaining before the Oct. 1 deadline for ICD- 10 implementation, the possibility of another delay is practically nil, experts say. The SGR fix law represented the last, best opportunity for Congressional opponents of ICD-10 to modify the transition timeframe. The fact that the final bill included no ICD-10 delays despite a significant lobbying effort suggests that the industry has finally accepted the deadline.
With so many providers already heavily invested in training, education, and planning for ICD-10, a last-minute delay would do more harm than good. Recently, lawmakers suggested that CMS take measures to make transition less painful as an alternative to shifting the deadline again. Two possible ways to make ICD-10 penalties less severe were suggested, but there seems to be no concrete way for CMS to institute them without essentially accepting both ICD-9 and ICD-10 codes after the deadline.
The ideas mentioned were:
- Creating a hardship exemption for ICD-10.This was raised by Rep. Andy Harris, a Maryland Republican and an anesthesiologist. Providers who could show that ICD-10 would be too great a financial burden would be exempt from converting and could stick with ICD-9. Unfortunately, this concept hasnÕt been well received by CMS; the agency points out that having to maintain two coding systems long-term would result in a claims-processing nightmare.
- Delaying the penalty phase for ICD-10 by two years. “The reasonable thing would be to delay the penalty phase for two years as people transition,” said Sen. Bill Cassidy, R-Louisiana, during a HHS budget hearing on April 23. The problem is that “delaying penalties” basically equates to paying for claims that still use ICD-9 after Oct. 1, so it’s not clear how CMS could make this workable.
The last few years of deadlines and delays have created enough pressure to spur many providers-especially large health systems and hospitals – to action, investing time and money to prepare for ICD-10. As more providers have paid to become ready, they have become less hostile to finally facing the music and seeing whether their preparations will hold up.
– Grant Huang, CPC, CPMA (ghuang@drsmgmt. com). The author is Director of Content at DoctorsManagement.