Medicare pay cut delayed until June 1

At least some claims may have been paid at the lower rate before the retroactive patch took effect, but Medicare contractors will reprocess those automatically.

By David Glendinning — Posted April 16, 2010

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Legislation to reverse a 21% Medicare physician payment cut and postpone it until June 1 was signed into law by President Obama.

The cut had taken effect April 1 as lawmakers engaged in a budget fight over how to pay for the bill, which also extends various unemployment and health assistance programs that had expired. Republicans wanted the bill to be paid for using new federal funds, while Democrats insisted that it be considered emergency spending that could be added to the federal deficit.

Senate Democrats on April 15 eventually were able to overcome procedural barriers posed by Republicans and force a final vote on the measure, which passed 59-38. The House subsequently approved the bill by a vote of 289-112 and the president signed it that night.

The American Medical Association, which had warned of a "Medicare meltdown" if the cut were allowed to stand, once again called on Congress to use the time provided by the latest delay to approve a permanent overhaul of the payment system.

"Repeated delays and continued uncertainty, combined with the fact that Medicare payments, even without the 21% cut, have not kept up with the cost of providing care to seniors, demonstrates the need for a permanent solution to this annual problem," said AMA President J. James Rohack, MD. "Congress must now turn toward solving this problem once and for all through repeal of the broken payment formula that will hurt seniors, military families and the physicians who care for them."

Although the Centers for Medicare & Medicaid Services had ordered contractors to hold April physician claims for 10 business days to give lawmakers more time to approve the cut reversal, that extension ran out at the end of the day April 14. On April 15, CMS said processing would resume at the lower rate, but that contractors would automatically reprocess those claims once any congressional patch took effect. At this article's deadline on April 16, CMS had not said how many claims might have moved into the processing pipeline before the 21% cut was officially delayed again.

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