Lack of ICD-10 delay in SGR fix not necessarily an all-clear, experts say

Meanwhile, proposed legislation could cost physicians more, leading to more alignment with hospitals.

Companion bills to repeal the sustainable growth rate make no mention of the pending rollout of ICD-10 coding, but healthcare consultants caution against reading too much into that.

An ICD-10 delay was inserted in last year’s “doc fix,” that delayed the change in the SGR for the 17th time.

The two “somehow got linked” and “now they’re forever linked,” said Vic Arnold, managing director of Huron Consulting Group.

[Also: SGR companion pays for fix with tax penalties]

But Arnold said ICD-10 still stands alone, and the Legislature has time to delay implementation before the Oct. 1 planned launch date.

Arnold said  it’s anyone’s guess if that will happen but said, “It appears this time they’re serious about implementing it. There’s no reason to hold back now.”

Though the SGR fix announced Tuesday had bipartisan support and was led by Speaker John Boehner, R-Ohio and House Minority Leader Nancy Pelosi, D-Calif., Senate Minority Leader Harry Reid, D-Nev., has voiced opposition, according to The Hill, which could pose a challenge when the bill comes up for a vote.

But the SGR needed to go away, according to Arnold, who leads a physician’s solutions practice.

[Also: SGR fix punts "two midnights" rule]

It was, he said, “A creaky, unwieldy payment mechanism that was supposed to restrain growth and hasn’t. It’s never really done its job.”

Lisa Bielamowicz, MD, chief medical officer and executive director of The Advisory Board Co., said the SGR fix is good for physicians, who for 20 years never knew if they were going to wake up to a 21-25 percent pay cut.

The 2014 doc fix expires April 1, with a vote on the replacement bill for SGR expected this week.

The SGR fix, which further moves Medicare payment for physicians from fee-for-service to a value-based model, will cost providers more money, but they were moving in that direction anyway, Arnold said. And it’s a good way to fund healthcare, he said.

“Be careful what you ask for,” he said. “What we’re seeing in the market, the physician group clients have picked up steam in the last six months to moving towards clinical alignment and clinical integrations. I think it means you’re taking on more cost. Getting deeper into clinical integration is going to cost money, the cost of analytics, the shift in cost in staffing.”

The core of that payment is now linked to Medicare.

Physicians in Chicago are having the same conversations about what SGR means, he said.

“Let’s go deeper into that advanced payer model world,” he said. “There’s lot of good clinical, business reasons to go there. Medicare is the bellwether.”

Bielamowicz said many small physician practices may not have the administrative or IT resources to step up.

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With the SGR fix’s new payment update of a half-percent for physicians, and the cost of operating a practice rising 6 to 7 percent a year, providers have to focus on practice efficiency, she said. That will lead to more independent physician practices aligning with hospitals, she said.

“This is another one of the factors that’s going to continue to increase that momentum,” she said.

“Fast-forward five years, it’s unclear whether the administrative burden will be higher or lower,” Bielamowicz said. “There is a glimmer of hope for lessening of the administrative burden.”