June 15, 2010

CMS has announced that it will extend the current hold on claims for services performed on or after June 1st through June 17th so that Congress can complete action on the SGR fix.  This follows on President Obama’s plea that the Senate pass legislation that would block the 21.3% cut in Medicare payments to physicians during his weekly presidential address last Saturday. The President said, "We cannot allow this to happen. We have to fix this problem so that our doctors can get paid for the life-saving services they provide and keep their doors open. We have to fix this problem to keep the promise of Medicare for our seniors so that they get the health care they deserve."

Below is the full text of the CMS announcement:

The Continuing Extension Act of 2010, enacted on April 15, 2010, extended the zero percent (0%) update to the 2010 Medicare Physician Fee Schedule (MPFS) through May 31, 2010.  At this time, Congress is debating the elimination of the negative update that took effect June 1, 2010.  The Centers for Medicare & Medicaid Services (CMS) is hopeful that Congressional action will be taken within the next several days to avert the negative update.

To avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians, non-physician practitioners, and other providers paid under the MPFS, CMS had instructed its contractors on May 27th to hold claims for services paid under the MPFS for the first 10 business days of June (i.e., through June 14, 2010). This hold only affects MPFS claims with dates of service of June 1, 2010, and later.

Given the possibility of Congressional action in the very near future, CMS is now directing its contractors to continue holding June 1 and later claims through Thursday, June 17, lifting the hold on Friday, June 18.

This action will facilitate accurate claims processing at the outset and minimize the need for claims reprocessing if Congressional action changes the negative update.  It also should minimize the provider and beneficiary burdens and costs associated with reprocessing claims.

We understand that the delayed processing of Medicare claims may present cash flow problems for some Medicare providers. However, we expect that the delay, if any, beyond the normal processing period will be only a few days. Be on the alert for more information regarding the 2010 Medicare Physician Fee Schedule Update.

We hope that this will be the end of the brinkmanship over the 21.3% cut and that anesthesia practices will at least be able to project their Medicare income for more than a month or two at a time. The solution to the SGR problem in the current legislation, H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010 (also referred to as the “Tax Extenders” bill) is far from perfect, however. Because the Tax Extenders bill does not eliminate the SGR formula but instead pushes the cumulative reduction out to 2014, the American Society of Anesthesiologists has withheld its support from the legislation. According to the ASA website,

The relevant provisions of H.R. 4213 include the following changes to the Medicare conversion factor:

• Effective June 1 - December 31, 2010: +1.3 percent update
• Effective January 1 - December 31, 2011: + 1 percent update
• Effective January 1, 2012 - December 31, 2013: Implementation of a new temporary alternative to the SGR formula. The new formula divides physician services into two “buckets” or service categories – primary care services and all other services – creating separate updates. The alternative also provides for a floor of 0 percent to prevent any specialty from experiencing a payment reduction. Special provisions would also allow physicians in Accountable Care Organizations (ACO) to establish ACO-specific payment update mechanisms.
• Effective January 1, 2014: The alternative formula is halted and payment rates return to levels determined by the previous SGR formula.

H.R. 4213 includes no provisions to address the longstanding problems inherent to the current SGR formula. Indeed, the SGR formula remains in effect even during the period in which the temporary alternative is in use. As a result, Medicare physician payments are projected to be cut 35 percent effective January 1, 2014.

As you can see, it remains vitally important for you to keep telling your Senators and Congressional representatives that the SGR formula has to go.

With best wishes,

Tony Mira
President and CEO