CMS Will Initiate 21 Percent Medicare Fee Cut Tomorrow

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.

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About MSNJ

Founded in 1766, the Medical Society of New Jersey is the oldest professional society in the United States. The organization and its dues-paying members are dedicated to a healthy New Jersey, working to ensure the sanctity of the physician–patient relationship. In representing all medical disciplines, MSNJ advocates for the rights of patients and physicians alike, for the delivery of the highest quality medical care. This allows response to the patients’ individual, varied needs, in an ethical and compassionate environment, in order to create a healthy Garden State and healthy citizens.

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