Congress Fails to Halt SGR Cut in Time to Avoid Reductions in Payment

By Government Relations Staff

June 21, 2010 — On Friday June 18, the Senate passed by unanimous consent a fully offset standalone bill to postpone the cut retroactive to June 1 and through November 30, 2010. Although the bill will head to the House for consideration next week, the Centers for Medicare and Medicaid Services (CMS) instructed Medicare Administrative Contractors (MACs) to begin processing claims today at the lower rate.

While the House of Representatives passed the American Jobs and Closing Tax Loopholes Act of 2010 (HR 4213) on May 28, the bill has been the subject of intense debate in the Senate regarding the extent of deficit spending, which caused Senators to work to further “trim” the packages to gain the needed 60 votes.

HR 4213, a controversial tax extenders bill, includes a provision to block the 21.3 percent Medicare Sustainable Growth Rate (SGR) cut retroactive to June 1, 2010, and through the end of 2011. The measure would provide a 2.2 percent update to provider payments for the rest of 2010 and an additional 1 percent for 2011.

The Medicare "sustainable growth rate" or SGR payment formula ties Medicare provider payments to factors related to the national economy. In recent years, the formula would have operated automatically to cut most provider payments if Congress had not acted to postpone the scheduled payment cuts.

The American Psychological Association Practice Organization (APAPO) continues to keep up the pressure for Congress to enact a permanent solution to the SGR payment formula. This is the third time that Congress has postponed the SGR cut this year alone.

The APAPO will keep members updated about emerging developments with postings in the Legal & Legislative Advocacy section of the Practice Central website and in the Practice Update e-newsletter.