Update on Medicare Fee Reductions

Claims to be Held for 10 Days

  • 14 January 2010
  • Author: Mike Cooke
  • Number of views: 2747

Technically, the 21.2 percent cut in Medicare fees is in effect as of April 1, 2010 but CMS has instructed its contractors to hold claims for the first 10 business days of April or until April 14, 2010.

As you know, Congress adjourned for its two-week spring recess without taking action to stop the reductions. We do know that Senate plans to hold a cloture vote after the recess which, if supported by 60 Senators, will allow a vote to occur on the legislation. That vote could occur as early as April 12.

Since CMS believes Congress is working to avert the April 1 negative update, CMS has instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule (including anesthesia services) for the first 10 business days of April.

This hold will only affect claims with dates of service April 1, 2010, and forward. The hold should have minimum impact on cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt.

However, if you are a non-participant with Medicare (that is, you accept assignment on Medicare claims on a case by case basis), there may be consequences.

If Congress does take action on April 12, 2010, there should be no problem for non-participating physicians who have been charging patients using the January/March 2010 Medicare Physician Fee Schedule Limiting Charge on non-assigned claims.

But if Congress does not take action, patients might need to receive refunds for charges billed beyond the negative 21.2% fee reduction effective April 1, 2010.

Thus, non-participating physicians have three options: (1) Hold off on billing Medicare patients from April 1, until Congress takes action or until April 14, 2010, whichever comes first; (2) bill Medicare patients using the January/March 2010 Fee Schedule, with the knowledge that if Congress takes no action, you might have to refund the patients; or (3) accept assignment from April 1, until a Congressional action is taken or until April 14, 2010, whichever comes first.

Non-participating physicians might also consider Opting Out of the Medicare Program and making private-pay arrangements with Medicare patients. Any physician who Opts Out will be out of the Medicare Program for a two-year period: no claims for the physician's services are to be submitted to Medicare - by the physician or by his/her patients. The only exception would be for services that are for urgent or emergent (i.e. life- or limb-threatening) care.

As more information becomes available, we will keep you apprised.

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