The Senate just approved by a vote of 64-35 the “Protecting Access to Medicare Act of 2014," that will again delay the 24% cut to Medicare physicians scheduled to begin on April 1st and instead provide a 0.5% increase through calendar year 2014 and freeze the final rates through March 31, 2015. The legislation passed the House last Thursday. The SGR patch bill delays the consideration of possible offsets for long-term SGR reforms until after the November elections. It is expected that the President will sign the bill into law.

The legislation also includes several health-related extenders. Among them the legislation includes a provision to extend the increased Medicare rates for ground ambulance services, including those in extremely rural areas of the country, until April 1, 2015. Staff on the Senate Finance committee indicated that this may be the last time that the extenders included in the sustainable growth rate (SGR) formula reform move forward with simple date changes/extensions. In the next round of SGR reform, they desire to do broader policy on extenders and it is likely the package of extenders will look different as the committee analyzes which extenders should be permanent and which should expire.

The Congressional Budget Office (CBO) estimated on a preliminary basis that the one year extension of physician pay rates would cost $11.2 billion through fiscal year (FY) 2015 and $15.8 billion over ten years. The legislation also includes several health-related extenders and riders which the CBO estimated would cost $14.4 billion through FY 2015, but save $1.2 billion over ten years.

As a reminder, in addition to delaying the cuts, the legislation will:

• delay reductions in payments to Disproportionate Share Hospitals expected under current law by one year and then make additional reductions through 2024
• extend the Medicare Geographic Practice Cost Index (GPCI) floor through March 31, 2015
• extend the Medicare therapy cap exceptions process through March 31, 2015
• extend the increased Medicare rates for ambulance services, including those in extremely rural areas of the country, through March 31, 2015
• extend the Medicare Low-Volume hospital payment for 12 months
• extend the Medicare-Dependent Hospital program for 12 months
• establishes appropriate use criteria
• extend the Medicare Advantage Special Needs Plan for one year through 2016
• allow Medicare cost plans to continue to operate through December 31, 2015 in an area where at least two Medicare Advantage coordinated care plans operate
• extend funding through the first six months of fiscal year 2015 for the National Quality Forum (NQF) until currently available funds expire
• extend outreach and assistance for low-income programs through March 31, 2015 for State Health Insurance Counseling Programs (SHIPs), Area Agencies on Aging (AAAs), Aging and Disability Resource Centers (ADRCs), and The National Center for Benefits Outreach and Enrollment
• make technical corrections to Long-Term Care Hospitals (LTCH) payment policy
• extend the Qualifying Individual (QI) program for 12 months
• extend the Transitional Medical Assistance (TMA) program for 12 months
• extend Express Lane Option for 12 months
• extend the Special Diabetes program through fiscal year 2015
• extend abstinence education through fiscal year 2015
• extend Personal Responsibility Education Program (PREP) through fiscal year 2015
• continue the Family to Family Health Information Centers (F2F HIC) program through fiscal year 2015
• continue the Health Workforce Demonstration for Low-Income Individuals for 12 months
• extend funding for the Maternal, Infant, and Early Child Home Visiting program through March 31, 2015
• extend funding for the development of pediatric quality measures
• delay, for two years (until October 1, 2016), the enactment of the Medicaid Third Party Liability provision
• delay until April 1, 2015 the use by recovery audit contractors (RAC) of the so-called “two-midnight” rule
• eliminate limitation on deductibles for small group health plans
• request that the Government Accountability Office (GAO) conduct an independent evaluation and submit a report concerning the implementation of the Children's Hospital GME program
• establish a skilled nursing facility (SNF) value-based purchasing (VBP) program by October 1, 2019
• reform current Medicare lab fee schedules by adopting market-based private sector payment rates for lab services
• prohibit the inclusion of the payment for the oral-only drugs that beneficiaries take related to End Stage Renal Disease (ESRD) in the Medicare per-dialysis treatment bundled payment rate through 2024
• establish CT equipment radiation dose standards for purposes of payment under the Medicare program in order to protect the health and welfare of beneficiaries
• use funds from the Bipartisan Budget Act of 2013 to offset the cost of the legislation
• allow the Secretary of Health and Human Services to use information received from medical providers and other sources to adjust code pricing to address misvalued codes used under the Medicare Physician Fee Schedule
• realign the Medicare sequester in 2024 without increasing the overall effect of the sequester on Medicare providers
• establish an eight-state demonstration program over a two-year period to incentivize community mental health providers to offer a broad range of mental health services
• authorize $15 million each for fiscal years 2015 – 2018 for demonstration grants for local jurisdictions to implement assisted outpatient treatment (AOT) programs for individuals with serious mental illness
• exclude the legislation's provisions from pay-as-you-go (PAYGO) requirements