The President Signs the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010
2.2 Percent Medicare Physician Fee Schedule Update for June 1, 2010 Through November 30, 2010
On June 25, 2010, President Obama signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.” This law establishes a 2.2 percent update to the Medicare Physician Fee Schedule (MPFS) payment rates retroactive from June 1 through November 30, 2010. The Centers for Medicare & Medicaid Services (CMS) has directed Medicare claims administration contractors to discontinue processing claims at the negative update rates and to temporarily hold all claims for services rendered June 1, 2010, and later, until the new 2.2 percent update rates are tested and loaded into the Medicare contractors’ claims processing systems. Effective testing of the new 2.2 percent update will ensure that claims are correctly paid at the new rates. We expect to begin processing claims at the new rates no later than July 1, 2010. Claims for services rendered prior to June 1, 2010, will continue to be processed and paid as usual.
Claims containing June 2010 dates of service which have been paid at the negative update rates will be reprocessed as soon as possible. Under current law, Medicare payments to physicians and other providers paid under the MPFS are based upon the lesser of the submitted charge on the claim or the MPFS amount. Claims containing June dates of service that were submitted with charges greater than or equal to the new 2.2 percent update rates will be automatically reprocessed. Affected physicians/providers who submitted claims containing June dates of service with charges less than the 2.2 percent update amount will need to contact their local Medicare contractor to request an adjustment. Submitted charges on claims cannot be altered without a request from the physician/provider. Physicians/providers should not resubmit claims already submitted to their Medicare contractor.
–Centers for Medicare and Medicaid Services
If legislation is not signed into law before the weekend, the Centers for Medicare & Medicaid Services (CMS) will have no option but to instruct its contractors to begin processing Medicare claims for physician services provided in June at rates that reflect the 21.3 percent cut. Once the House and Senate act to avert the cut, claims will be processed as follows: (1) where the submitted charge is higher than the new rate, the contractor will automatically reprocess the claim; and (2) if the submitted charge is lower than the new rate, the physician should call the contractor. CMS says almost all physicians submit claims for more than the Medicare rates. No one is going to be reviewing the limiting charge for the period that the cut was in place because CMS assumes Congress will ultimately make the fix retroactive. Finally, the OIG and CMS are close to releasing a document to waive patient co-pay requirements for situations such as the retroactive increases that were made to the geographic practice cost index (GPCI) increases. CMS will share that document once it is available.
Senate Impasse on Medicare Physician Pay Harms Patients & Physicians
As the clock continues to tick toward Friday’s final deadline for implementation of the 21.3 percent cut in Medicare physician payments produced by the sustainable growth rate (SGR) formula, Senate debate continued on June 17 over H.R. 4213, the American Jobs and Closing Tax Loopholes Act. In addition to providing another short-term reprieve from the impending Medicare cut, the legislation would increase federal Medicaid funding and extend various expiring programs such as disaster relief and long-term unemployment insurance benefits.
The debate and delay in the Senate centers on growing concerns about how much the legislation would add to the federal deficit. On June 16, a substitute amendment to the House-passed version of the bill, offered by Senator Max Baucus (D-MT) was defeated on a bipartisan vote of 45-52. That amendment would have afforded a 19-month reprieve from the scheduled Medicare payment cuts by providing a 2.2 percent update for the remainder of 2010 and an additional 1.0 percent update in 2011. In 2012, physician payments would have been reduced by 33 percent.
After the defeat of his first amendment, Senator Baucus introduced a second substitute amendment late on June 16 with reduced spending and additional funding offsets. The SGR relief provision was scaled back to a six-month, 2.2 percent update that would expire on November 30, 2010, after which the 21.3 percent cut originally scheduled for 2010 would take effect. Reports from Capitol Hill today indicate that this package may still lack the bipartisan supported needed to reach the 60 vote threshold required to end debate and pass a final bill.
Earlier today, an amendment offered by Senator John Thune (R-SD) was defeated on a vote of 41-57. The amendment was far less costly than either Baucus proposals, and according to the Congressional Budge Office would begin reducing the federal deficit. It also would have provided 2.0 percent Medicare physician payment updates for the remainder of 2010 and all of 2011 and 2012, following by a steep payment cut of well over 30 percent and an additional statutory cut of 4 percent. The Thune amendment also included medical liability caps on non-economic damages and other traditional tort reforms.
Because the Senate is considering substantial revisions to H.R. 4213, the bill will have to be sent back to the House for passage. While House leaders have indicated they are prepared to stay in session late tomorrow so that a vote can be held on the bill, it is far from clear that the Senate will be able to complete its consideration before the weekend.
Failure by Congress to fulfill its responsibilities is undermining patient care in America. Three times this year, Congress has missed a deadline for dealing with Medicare’s sustainable growth rate (SGR) formula, raising the specter of a 21 percent payment cut for physician services. The disruption and uncertainty for patients and physicians has made Medicare an unreliable program.
If Congress does not act this week, Medicare physician payments will be cut 21 percent. These cuts will also extend to the TRICARE program which serves military families, as well as some Medicaid programs, workers compensation programs and private insurance plans. The ripple effect of the 21 percent Medicare cut will be devastating to physician practices.
Congressional mismanagement of the Medicare program will force more physicians to stop accepting new Medicare and TRICARE patients; lay-off staff; and defer investment in new medical equipment, health information technology, and other innovations that improve patient care.
Patients and physicians should not become collateral damage in a Congressional stalemate on budgetary matters. We expect our elected officials to resolve the budget issues without punishing physicians, seniors and military families.
Past actions by Congress created the current budgetary challenge. Further, since 2003, Congress has compounded this problem by employing budget gimmicks that defer immediate cuts by stipulating deeper cuts in future years.
Democrats and Republicans agree that the flawed Medicare formula that is responsible for pending cuts should be repealed. The annual SGR battle diverts attention from more productive delivery and payment reform initiatives. We must move to a payment system that fosters innovation and rewards physician efforts to lower the rate of growth in Medicare spending across the existing silos in the program.
Medicare must adequately cover the cost of care and close an existing 20 percent gap as measured by the government’s own conservative measure of annual increases in medical practice costs.
We must also allow seniors who wish to contract directly for their care with a physician of their choice to do so without foregoing the Medicare benefits for which they paid during their working years. Medicare benefits were earned by and belong to Medicare beneficiaries. They must be allowed to assign these benefits as they see fit.
Playing brinksmanship with the health care of seniors and military families is inexcusable and represents a dereliction of duty. We urge Congress to honor its obligation to provide access to quality care to America’s seniors and military families by taking action to fix the Medicare physician formula problem now!
American Academy of Dermatology
American Academy of Facial Plastic & Reconstructive Surgery
American Academy of Family Physicians
American Academy of Hospice & Palliative Medicine
American Academy of Neurology
American Academy of Ophthalmology
American Academy of Pain Medicine
American Academy of Pediatrics
American Academy of Physical Medicine & Rehabilitation
American Academy of Sleep Medicine
American Association for Hand Surgery
American Association of Clinical Endocrinologist
American Association of Clinical Urologist
American Association of Neurological Surgeons
American Association of Neuromuscular & Electrodiagnostic Medicine
American Association of Public Health Physicians
American College of Cardiology
American College of Emergency Physicians
America College of Gastroenterology
American College of Obstetricians & Gynecologists
American College of Occupational & Environmental Medicine
American College of Rheumatology
American College of Surgeons
American Gastroenterological Association
American Institute of Ultrasound in Medicine
American Medical Association
American Orthopaedic Foot & Ankle Society
American Society for Clinical Pathology
American Society for Reproductive Medicine
American Society for Surgery of the Hand
American Society of Addiction Medicine
American Society of Cataract & Refractive Surgery
American Society of Cytopathology
American Society of Ophthalmic Plastic & Reconstructive Surgery
College of American Pathologists
Congress of Neurological Surgeons
Heart Rhythm Society
North American Spine Society
Renal Physicians Association
Society of American Gastrointestinal Endoscopic Surgeons
Society of Nuclear Medicine
Medical Association of the State of Alabama
Alaska State Medical Association
Arizona Medical Association
Arkansas Medical Society
California Medical Association
Colorado Medical Society
Connecticut State Medical Society
Medical Society of Delaware
Medical Society of the District of Columbia
Florida Medical Association, Inc.
Medical Association of Georgia
Hawaii Medical Association
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Illinois State Medical Society
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MedChi, The Maryland State Medical Society
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Tennessee Medical Association
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Vermont Medical Society
Medical Society of Virginia
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West Virginia State Medical Association
Wisconsin Medical Society
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Cumberland County Medical Society pens a letter to MSNJ regarding Horizon BCBS executive compensation
June 2, 2010
Dear Mr. Kornett,
The Cumberland County Medical Society enthusiastically supports the Medical Society of New Jersey (MSNJ), other County medical societies, our Congressional delegation and State lawmakers in expressing outrage at the excessive compensation package awarded to the executives at Horizon Blue Cross/Blue Shield. According to the filing made by Horizon to the state Department of Banking & Insurance (DOBI) and, as reported by Michael Diamond of the Asbury Park Press in a May 19th article, CEO William J. Marino alone will be compensated to the tune of $8.7 million. Furthermore, this compensation package pays the nine senior executives a total of $24.3 million, up from $15.1 million the previous year! Meanwhile, premiums paid by employers and individuals have risen by double digits for the past decade while reimbursement for the services has decreased proportionally.
The State and especially Cumberland County is suffering from record unemployment. Layoffs and furloughs are inevitable. Therefore, statements and actions made by Michael T. Kornett, CEO of the MSNJ, US Senator Frank Lautenberg and NJ Senate President Steve Sweeney are timely and appropriate.
We would encourage all workers as well as all local employers to call and support Sen. Sweeney in his desire to hold hearings so that Horizon executives can justify acceptance of this outrageous compensation given the current economic state of affairs. Please let State Senator Jeff Van Drew and Assemblymen Nelson Albano and Matt Milam know that we cannot afford increased premiums to line the pockets of management of a not-for-profit health insurance company.
Horizon should explain how it can justify premium increases when it has over $2 billion dollars in cash surplus. It is our position that any amount above what is required by statue to be retained in reserve should be immediately returned to policyholders. In addition, we call on the DOBI Commissioner Thomas B. Considine to act on behalf of consumers and reject any future request by Horizon for premium increases.
State legislators should consider empowering the Commissioner with the authority to not only approve rate increases but compensation to management of not-for-profits as well. Also, insurance companies should never be allowed to monopolize. Consequently, they should never control more than 30% of the local market. This was a regrettable oversight by previous Commissioners.
Lastly, the Congress of the United States should draft legislation removing any anti-trust exemption that all insurance companies have enjoyed for the past twenty years.
Insurance companies, regardless of corporate or tax structure should compete for our business. New Jerseyians should be the winners and not the losers of public policy that affects our healthcare.
Donald C. Huston, Jr., DO,
Armando P. Russo, MD,