CMS plans swift action on Medicare pay

Physicians will not need to resubmit Medicare claims after Congress approves the rate freeze in late January or early February.

By David Glendinning — Posted Jan. 23, 2006

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Washington -- While physicians wait for lawmakers to wrap up their unfinished business of erasing this year's Medicare pay cut, federal officials say the program is poised to carry out the change.

One of the House's first tasks when it returns to Washington Jan. 31 will be consideration of the Senate-passed Deficit Reduction Act of 2005. Once approved by the House and signed by President Bush, as expected, the legislation will halt the 4.4% Medicare reimbursement cut that kicked in at the beginning of the year and will restore physician payments to 2005 levels.

The Centers for Medicare & Medicaid Services intends to act quickly to implement this anticipated rate change, wrote Herb Kuhn, director of the agency's Center for Medicare Management, in a recent letter to lawmakers. Carriers will be instructed to begin paying claims at the revised levels within two days of the measure's enactment.

Because the legislation as written makes the reimbursement freeze effective Jan. 1, carriers also will receive instructions to reprocess all of the claims that were submitted during the time that the rate cut was in effect, Kuhn stated. Doctors will not need to go to the trouble of resubmitting all of their January claims to receive the proper reimbursement.

The American Medical Association applauded CMS for planning such a quick turnaround and for working to minimize the administrative burden to practices.

"The AMA continues to work closely with CMS to make the update process as smooth as possible for physicians," said AMA President J. Edward Hill, MD. "Automatic reprocessing of claims retroactive to Jan. 1, 2006, is a help to physician offices swimming in paperwork and an important assurance from CMS as physicians make decisions affecting patient care."

Because carriers will need to reconsider tens of millions of claims, some physicians might have to wait several months before the program reimburses them correctly for the Medicare services they provided at the beginning of the year. If Congress and the White House approve the measure in early February, doctors will receive a lump sum payment no later than July 1 that makes up the difference between their reduced reimbursements and the rate that they will receive under the freeze.

Some physicians might need to bill medigap plans or secondary insurers separately to get what they are owed.

The agency also plans to give doctors who decided that they no longer could afford to see Medicare patients one more chance to participate in the program this year, Kuhn wrote. Soon after enactment of the Deficit Reduction Act, CMS will launch a special 45-day enrollment period during which physicians who dropped out of the program at the end of 2005 may rejoin for the new year.

Backers of the budget-cutting bill, which contains the Medicare freeze, said prior House approval of a nearly identical measure bodes well for its passage soon after the chamber returns. But opponents of the measure's sweeping cuts to entitlement programs, including Medicaid, hope to turn the tide against it before that can happen.

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