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SGR Rate Cut – Complete Roll Back?

Mar 24th 2014 at 4:11 AM

The sequential introduction of numerous healthcare reforms in the US lately, has put a lot of pressure on healthcare Providers. Right from HIPAA 5010 adoption and ICD-10 implementation to HHS sequestration cut and PQRS reporting system, several changes have come into effect, giving Healthcare Facilities and Providers a tough time to adapt. Incorporating these changes has affected the normal workflow of medical billing and collections resulting in substantial revenue loss to the Providers who are already facing payment cuts. Medical billing outsourcing is one solution to better medical claims management.

SGR Rate Cut - Apart from the aforementioned changes, Providers are highly concerned about the impending SGR (Sustainable Growth Rate) payment cut that has risen to 24% over the years. As this rate cut is being postponed every year since 2003, Providers are wishing that it never takes effect in the near future. The annual common ritual has taken place this year too. Yes! The SGR payment cut has been yet again postponed from January 1st to April 1st. Revenue cycle and medical claims management would be extremely burdening if this payment cut takes effect on April 1st. Will the proposed SGR payment cut be repealed this year? Let us take a look at the recent developments:

The Bipartisan Budget Act of 2014: Congress has introduced the Bipartisan legislation on February 6th this year in order to repeal the SGR payment cut proposal. Some of the salient features of this act are as follows,

  • A three month extension has been provided by postponing the SGR commencement date to April 1st.
  • New payment structures will be drafted in the meantime to promote controlled healthcare cost growth and betterment of patient care.
  • The Provider payment rates will be increased by 0.5% for the next 5 years.

Worst-case Scenario: Although the APA Practice Organization (APAPO) has cast its support to the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, we cannot concretely conclude that the SGR might take a complete roll back. If the worst-case scenario - which is the SGR proposal coming into effect happens, then Providers will face a huge revenue loss. Ultimately, the normal medical billing and collections workflow gets affected. Outsourcing a part of medical billing services to a reliable physician billing solutions providing company will be of help in mitigating this risk to a certain extent.

Best-case Scenario: As every Provider expects, Congress must take steps in repealing the SGR payment cut proposal and put the Bipartisan Act into effect. This will give Providers and Facilities a long term insight of reimbursements rather than the threat they face each year with the SGR cut.

Providers must be ready to face either of these cases and keep their practice in good shape. Medical billing outsourcing would make a prudent solution to keep medical billing and collections unaffected by recurring healthcare changes.

About MGSI:

When it comes to medical billing outsourcing, look no further than MGSI, a Florida-based national physician billing solutions provider. This renowned medical billing company has more than 20 years of experience in providing high-quality medical billing and collection services to its clients across the US. To learn more details, log on to

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