Finally, the Senate sent a permanent Sustainable Growth Rate (SGR) solution to the president’s desk on a vote of 92 to 8. The bill, H.R. 2, will eliminate the perennial threat of providers paying for a “Doc Fix” and inject much-needed stability for the long term and post-acute care sector.

This is a historic victory for our profession. The annual routine of fixing the flawed SGR formula was always a billion-dollar risk for skilled nursing providers. Though the bill does contain a cut to our profession, it is a fraction of what we would have faced if we continued the risk of being a pay-for year after year. In addition, the law provides important therapy relief.

What’s Included

• Stability – A permanent fix to the annual SGR battle. The doc-fix limped along year-to-year for a total of 17 patches since 2003. We estimate that skilled nursing has been cut by more than $27 billion to pay for short-term SGR fixes.
• Therapy Reforms – The bill includes a 33-month extension of the therapy cap exceptions process (through December 31, 2017). This allows providers to continue delivering therapy above the current $1,940 threshold as long as supporting coding and documentation show the services were medically necessary. 

The legislation also mandates our proposed therapy review process to take the place of current manual medical review (MMR). The new structure will be in place within 90 days of enactment of the bill. It will target providers with high denial rates and outlier billing patterns as well as new providers, certain medical conditions and certain group practices. It also takes RACs out of the review process.

The new system is limited to $10 million in funding across all provider settings for FY 2015-2016, which will substantially limit the regulatory burden on skilled nursing therapy services.
• 1 Percent Market Basket Update – Skilled nursing is part of the pay-for in this bill. Under the proposal, skilled nursing providers will receive a 1 percent market basket increase, net of other adjustments, in FY 2018. This increase takes into account the productivity adjustment within the Affordable Care Act. 

Looking Ahead

A permanent repeal of SGR is the first step in establishing a new level of certainty and stability for care providers across the country. The needed reforms and extensions to therapy will go a long way in helping tens of thousands of residents who rely on these therapies to return to their communities.