Update on Medicare Payment Cuts

As reported to our members last week, due to the fact that Congress failed to approve a bill to stop the Medicare payment cuts, there is currently a hold on Medicare claims for ten business days – through July 15th. The Medicare Part B carrier for Ohio - Palmetto GBA - has informed the AMCNO that the Center for Medicare and Medicaid Services (CMS) is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of health care services and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the Medicare physician fee schedule, beginning July 1st.

CMS has instructed its contractors (PalmettoGBA in Ohio) to hold claims for the first 10 business days of July, for dates of service in July. This should have minimum impact on provider cash flow because, under current law, electronic claims are not paid any sooner than 14 days (29 days for paper claims) after the date of receipt. Meanwhile, all claims for services delivered on or before June 30 will be processed and paid under normal procedures.

Listed below are some pertinent questions and answers on this issue. The Questions and Answers apply to the recent decision by the Centers for Medicare & Medicare Services to hold claims paid under the Medicare physician fee schedule (MPFS) up to 10 business days that contain July 2008 dates of service.

Q1. Will claims containing services paid under the MPFS be held that contain both June and July dates of service?

A1. Yes, your local contractor will hold the entire claim for 10 business days.

Q2. Will claims be held that contain both services paid under the MPFS and services paid under a separate fee schedule?

A2. Yes, claims that contain both services paid and not paid under the MPFS will be held. For example, a claim with a July date containing an Evaluation and Management code and a drug code would be held.

Q3. Does the holding of claims paid under the MPFS also include anesthesia and purchased diagnostic services?

A3. Yes, contractors will hold all claims with dates of service July 1, 2008, and after that contain services paid under the MPFS, including anesthesia and purchased diagnostic services.

There is the possibility that Congress may do what has been done in the past and rescind the reimbursement cut retroactive to July 1st. If this occurs, CMS would more than likely reprocess claims that had already been processed. Physician practices may want to consider holding claims until there is a clear indication from Congress as to how they plan to resolve this issue. There are discussions underway this week in Congress attempting to come to a resolution on this matter. Please continue to watch for AMCNO email alerts on this important issue.