June SGR cut blocked by House; awaits Senate vote

Due to a lack of final action, the SGR cut will technically take effect on June 1

By Government Relations Staff

May 31, 2010 — On May 28, the House of Representatives passed the American Jobs and Closing Tax Loopholes Act of 2010 (HR 4213), a large controversial bill that includes a provision to further delay the 21.3 percent Sustainable Growth Rate (SGR) cut through the end of 2011. The measure would also provide a 2.2 percent update to provider payments for the rest of 2010 and an additional 1 percent for 2011.

The bill will also need to pass the Senate, which has adjourned for the Memorial Day recess and plans to return on June 7. Due to a lack of final action, the SGR cut will technically take effect on June 1. In the meantime, the Centers for Medicare and Medicaid Services (CMS) have instructed Medicare Administrative Contractors (MACs) to hold claims for 10 business days to provide more time for Congress to act without adversely affecting provider payments. In previous instances when Congress failed to stop the SGR cut in time, payment adjustments were made retroactively.

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 a long-term solution to use of 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 recent developments with postings in the Legal & Legislative Advocacy section of the Practice Central website and in the Practice Update e-newsletter.