Medicare claims processing to resume with 21% pay cut

CMS will automatically reprocess claims at a higher rate once a retroactive freeze on pay rates is approved by Congress and the White House.

By David Glendinning — Posted April 15, 2010

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Congress ran out of time to prevent at least some Medicare physician claims filed in April from being paid at a reduced rate.

On April 15, Congress was still considering a bill that would retroactively freeze pay rates to reverse a 21% cut that took effect on the first of the month. The Centers for Medicare & Medicaid Services had instructed contractors to hold off on processing April claims for 10 business days to give lawmakers more time to act, but that deadline expired at the end of the day on April 14.

"Therefore, under current law, Medicare contractors will begin processing claims with dates of service April 1 and later at the negative update rates," said Ellen B. Griffith, a CMS spokeswoman. "This will begin as soon as systems are fully tested to ensure proper claims payment."

If, as expected, Congress approves legislation reversing the pay cut, Medicare will automatically reprocess any claims submitted at the higher rate but paid at the reduced rate, Griffith said. She also noted that physicians might choose to hold onto any April claims they haven't filed until congressional action is final.

Not all of the April claims that physicians sent so far are expected to have the 21% reduction applied. Because contractors pay claims on a rolling basis, the rates likely will be corrected before all of them are processed.

At least one Medicare contractor said it would take a few additional days allowed under the federal prompt-payment statute before it would start processing April claims. NHIC, Corp., the contractor that handles Part B claims for much of New England, said it would wait until April 20 before starting its processing.

At this article's deadline, the Senate had just passed a measure that would reverse the pay cut and postpone it until June 1. The House also had to act before the bill could head to the White House.

The American Medical Association decried the latest 11th-hour rush to undo deep rate cuts for doctors.

"Medicare physician payment comes down to the wire today as the Senate scrambles once again to delay the 21% Medicare cut before physicians feel the impact in their payments this week and a Medicare meltdown begins," AMA President J. James Rohack, MD, said in an April 15 statement. "Congress' failure to stave off the Medicare physician payment cut leaves physicians in limbo and puts seniors' access to care and choice of physician in serious jeopardy."

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