Archive by Author | larrydowns

SGR Update – Medicare cuts scheduled to go into effect March 1, 2010

Yesterday, the House passed HR 4691, legislation that extends a number of expiring programs for 30 days, including current Medicare physician payment rates, which would once again postpone the 21% cut that was scheduled to take effect this year.  The Senate attempted unsuccessfully on several occasions last night and this morning to pass the same bill by unanimous consent, but objections were raised by Senator Jim Bunning (R-KY), on the basis that $10 billion cost of the program extensions was not offset.  The Senate has now adjourned for the weekend, so the 21% Medicare physician payment cut will be effective on Monday, March 1.  

We have been informed by the Centers for Medicare and Medicaid Services (CMS) that they are notifying their contractors to hold Medicare physician claims for 10 business days, effective Monday.  The agency will also be sending out a similar message on its various list serves this afternoon to physicians, and contractors will be instructed to disseminate this information as well.

Members of the Federation are urged to express their outrage to Congress about its terrible mismanagement of the Medicare and TRICARE programs, which are so important to the health and well-being of Americans who have served our nation so long and so well.    Tell them: 

  • Congress had more than a year to repeal the Medicare payment formula and ensure the security and stability of the program.  Instead, it has abandoned patients who rely on Medicare and TRICARE for their health care.
  • Parliamentary procedures offer no excuse for the harm they are causing these programs. 
  • Stop playing games with patients and the physicians; repeal the sustainable growth rate (SGR) formula once and for all.


Use the AMA’s Grassroots Hotline:  1-800-833-6354.

UPDATE: Medicare Fee Cut

MSNJ is monitoring the proposed Medicare fee cut that is scheduled to take place effective March 1, 2010.  MSNJ participated on a national conference call with the AMA Government Relations Office earlier today.

 Based on the latest information the AMA expects Congress to approve a short term extension of the current payment formula.  The extension will allow Congress additional time needed to consider reform legislation that includes a fix to the SGR formula.  The following information was received from the AMA late this afternoon.

 “Congress has been unable to resolve the Medicare sustainable growth rate (SGR) crisis during the two-month extension that prevented a 21% cut from taking effect on January 1.  Today, Senate Majority Leader Harry Reid is expected to ask for consent on the Senate floor that current SGR payment levels be extended for an additional 30 days to prevent scheduled cuts from going into effect on Monday, March 1.  This extension will be part of a larger package that addresses other expiring provisions that are considered “must pass” items, such as unemployment insurance and COBRA coverage.  The House is expected to consider the package later this week.  The AMA has insisted that Congress act this year to permanently repeal the SGR formula, and has continued to meet with Congressional and Administration officials to press that point. 

At present, we do not expect any disruptions in processing Medicare physician claims next week.

Physicians have until March 17 to change their Medicare “participating” or “non-participating” status; it is unclear whether that deadline will be extended in response to upcoming Congressional action.  The AMA has updated its guidance document, “Medicare Participation Options for Physicians” to address important considerations for physicians when making their 2010 participation decision.  That document is available on the AMA web site, at:

Assignment of Benefits Bill Signed into Law

MSNJ has learned that Acting Governor Stephen M. Sweeney signed S114 into law this past Saturday. The law will take effect in 12 months.

Under the new law, when a patient assigns their benefits under a health insurance policy to a healthcare provider, their insurer must honor that request.  The insurer may opt to issue a check jointly payable to the healthcare provider and patient, however the check must physically be sent to the provider of services.

This law remedies years of frustration where a provider of medical services who is out of network with a patient’s insurance company would see payments go directly to patient, leaving the provider to collect the fee.   The cost to collect would reduce the provider’s income and in some instances the provider would never be paid.

The Medical Society of New Jersey partnered with many medical specialty societies to move this bill through the Legislature.  This bill represents two years of advocacy on behalf of physicians.

Assignment of Benefits Bill Passes the Legislature

MSNJ urges Governor to sign A-132

Legislation requiring health insurers to remit a patient’s reimbursement directly to an out-of-network provider has passed the Senate, just days after passing the Assembly and a week after clearing its biggest hurdle before the Assembly Financial Institutions and Insurance Committee.

This legislation, which has been one of the most hotly debated healthcare issues in the concluding weeks of the 2008-2009 legislative session, would require insurers to honor a patient’s “assignment of benefits” to an out-of-network provider by sending payment directly to physicians.  Currently, honoring assignment is optional, and many payers continue to send checks to consumers leaving the opportunity for the check to not reach the physician.

The bill, which had sailed through the Senate in 2008, stalled in Assembly committee as policy makers debated the appropriateness of insurers using the “assignment issue” as a tool to encourage network participation.  The Assembly eventually settled on a compromise which mandates direct payment while giving insurers the option of requiring two signatures—the provider’s and the patient’s—on the check.  The compromise preserved some difference in payment between participating and out-of-network providers, while assuring that physicians have better control over their billings.

In it’s final form, A-132, the “Assignment of Benefits” bill:

  1. Guarantees that insurance payments will be mailed directly to physicians regardless of their network participation;
  2. Assures checks from health insurers can only be used to pay healthcare providers; and,
  3. Puts doctors in the driver’s seat by assuring that they are aware of when checks are cut, mailed, and signed by the appropriate party.

MSNJ joins the Hospital Association and countless other medical specialty societies in celebration of this tremendous success, and thanks all of our coalition partners for their hard work.

Assignment of Benefits Legislation Passes NJ Assembly

Senate bill 114 (Assignment of Benefits) passed in the Assembly today with 63 votes in favor, six votes opposed and six abstentions.  The legislation compels health insurers to remit payments directly to healthcare providers where a patient executes a valid assignment of their health insurance benefit.

The bill will require approval of certain amendments by the Senate before it can move to the Governor’s Office for signature.  Please check here regularly for updates as the 212th legislative session draws to a close.

Assignment of Benefits Bill Advances

The Assembly Financial Institutions and Insurance Committee released A132 (Assignment of Benefits) today.  In a unanimous vote, the committee approved the legislation and adopted amendments to the bill where insurers may issue checks jointly payable to the insured and the healthcare provider.  The checks will be physically issued to the healthcare provider.

The other amendment lengthened the effective date of the legislation from three months to one year.

The bill is scheduled for a vote by the full Assembly on Thursday.  The Senate will need to adopt the Assembly amendments before the bill moves to the Governor’s Office.