Since 1997, Washington had continued to dance around this issue, issuing annual ‘patches,’ with the most recent being made in March of 2014. For months, providers across the nation were left wondering what, if anything, the government would do to control these rate cuts.

As of April 14, crisis, which again was expected relative to the proposed 21% rate cuts, was averted with the passing of The Medicare Access and CHIP Reauthorization Act, H.R. 2. The initial reaction to the act has been positive, given that it provides, for the first time, a permanent solution to the issue that has plagued providers for years.
This article will explore in more detail the timing of the SGR repeal, as well as provide an update on Meaningful Use and some recent IRS relief for those employers that reimburse employees for medical insurance.

SGR Patch
With the March 31 deadline of the previous SGR patch set to expire, the House made the first step toward a first real and permanent solution to the matter. Facing mounting pressure from the provider community about a permanent rather than temporary fix, on March 26, members voted in a bipartisan manner to pass the act, which was then immediately passed along to the Senate. Unfortunately, the Senate took its April recess before having a chance to vote on the matter, meaning that the rate cuts were going into effect.

With hopes that the Senate would return and pass this repeal of the SGR, the Centers for Medicare and Medicaid Services (CMS) called for a hold to claims submitted after March 31. In the event of repeal, this would help to avoid costly retroactive payment adjustments on processed claims. This decision paid off, with approval of the act and repeal of the SGR taking place on April 14. The president is expected to provide his final approval.
With the MGMA and AMA publicly lobbying for a permanent fix to the SGR for some time, their efforts have paid off. Of note to providers with the passing of this legislation is the renewed ability to continue to provide the best care for their patients without the worry of continued reimbursement rate cuts. Additionally, from July 2015 through 2019, a conversion factor of .5% will be established, providing for annual increases.

Meaningful Use
In the Meaningful Use front, there have been two significant developments. The first is that the Office of the Inspector General (OIG) will begin auditing incentive-payment reimbursements. While many of the specifics have not yet been released, these audits will apply to payments dating back to January of 2011. For eligible providers that have received, and continue to receive payments under the Medicare incentive provisions, now is the time to ensure that proper documentation is in place, before the OIG comes to ask for the incentive payment back.

Secondly, proposed rules for Stage 3 Meaningful Use were issued on March 20. When they take effect, beginning in 2017, these rules will govern Medicaid incentive payments and Medicare payment adjustments. The shift in focus with Stage 3 will be more of a focus on use of Electronic Health Records (EHR). The number of measures will be reduced; however, meeting those measures will become more difficult.
Certain examples include a requirement to increase the percentage of e-prescribing that takes place, as well as to increase the percentage of patients that are provided access to view their health records online, among others. More importantly, it should be noted that essentially all providers will be required to meet the requirements of Stage 3 by 2018 or be faced with negative payment adjustments from Medicare and Medicaid.

IRS Penalty Relief
The Affordable Care Act (ACA) has affected employers in many ways since its passing in 2010. While the intent was to increase the number of individuals covered by health insurance and also improve care for all Americans, it did have one unintended consequence. This involved the imposition of significant penalties under IRC section 4980D for those employers that reimbursed employees for health insurance.
Up until the passing of the ACA this was a common practice for many small employers, as it often times was more cost effective than obtaining group plans.
Fortunately for those taxpayers who still maintain these types of arrangements, there is now some relief. Included in IRS Notice 2015-17, the IRS is providing relief from certain excise penalties that normally would have been imposed under these provisions for the period during 2014 and through June of 2015. This transition relief allows employers who maintain these types of arrangements to contact their insurance providers and other business consultants to identify what, if any, changes need to be made to their current policies. Some options that have worked for employers have been the creation of an acceptable employer sponsored plan, as well as payment of a bonus for these costs, as opposed to a direct reimbursement.
For the first time, providers can now breathe a permanent sigh of relief knowing that Medicare reimbursement rate cuts have been repealed. However, with Stage 3 Meaningful Use soon to be implemented, it is time to work toward compliance in order to avoid other future Medicare reimbursement cuts. n

James T. Krupienski, CPA is a senior manager with Meyers Brothers Kalicka, P.C., certified public accountants and business strategists; (413) 536-8510; www.mbkcpa.com