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Washington Highlights

House Passes 12-Month SGR Patch, Senate Scheduled to Vote Next Week

March 28, 2014—The House of Representatives passed on a controversial voice vote March 27 the Protecting Access to Medicare Act of 2014 (H.R.4302), legislation that would prevent a 24 percent cut in Medicare physician payments beginning April 1. The bill extends the current Sustainable Growth Rate (SGR) patch and a number of additional health care provisions through March 2015 at an estimated cost of nearly $21 billion over 10 years.

The vote was initially postponed after strong physician stakeholder opposition to passing another SGR patch brought into question whether House Republican leadership could secure the necessary two-thirds vote required to pass the bill under a suspension of the rules. After an extended delay, the measure was brought back to the floor and quickly passed by voice vote. 

Unable to secure consent to take up the SGR patch this week, Senate Majority Leader Harry Reid (D-Nev.) reached an agreement with Minority Leader Mitch McConnell (R-Ky.) to debate and vote on the SGR patch legislation on March 31, one day before the physician pay cut goes into effect.

The agreement also gives Senate Finance Committee Chair Ron Wyden (D-Ore.) additional time to build support for the Medicare SGR Repeal & Beneficiary Access Improvement Act of 2014 (S. 2110) and pay for it using Overseas Contingency Operations (OCO) funds [see Washington Highlights, Mar. 21]. Sen. Reid praised Sen. Wyden’s efforts and expressed his support for passing the bipartisan Medicare physician payment reform legislation.

While offsets in the House-passed legislation did not include cuts to Medicare graduate medical education (GME) or hospital outpatient department (HOPD) payments, they did include $2.3 billion in cuts from the extension of the Medicare sequester through 2024 [see Washington Highlights, Feb. 14] and $4.4 billion in Medicaid Disproportionate Share Hospital (DSH) payment cuts in 2024. The bill also includes $4 billion in savings from misvalued Physician Fee Schedule (PFS) codes.

Other provisions of interest to academic medicine include:

  • A six-month extension to the Two-Midnights Rule enforcement delay, which prevents Recovery Audit Contractors (RACs) from auditing claims for hospital inpatient admissions of less than two midnights until April 1, 2015;
  • A one year delay of scheduled Medicaid DSH cuts until 2017;
  • An extension of the Medicare Geographic Practice Cost Index (GPCI) floor through March 31, 2015;
  • A one-year delay in the transition from Medicare ICD-9 to ICD-10 until October 2015; and
  • A Government Accountability Office (GAO) independent evaluation and report concerning the Children’s Hospital GME Program.


Len Marquez
Director, Government Relations
Telephone: 202-862-6281


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806