Medicare Rates Plummet as Congress Fails to Act

Medicare claims hold expires

On April 1, the second short-term reprieve from a 21.3 percent Medicare physician payment cut that was scheduled to take effect in 2010 expired, after the Senate failed to approve a House-passed bill that would have extended 2009 payment rates a third time, through the end of the month.  The Centers for Medicare & Medicaid Services (CMS) subsequently instructed its contractors to refrain from processing physician claims at the reduced rates for 10 working days, anticipating that Congress would return from its spring recess and pass another short-term extension of 2009 rates and avoid implementation of the cut.  Today, Thursday, April 15, 2010, Medicare’s hold on physician claims officially expires.  While some carriers have the capacity to hold claims for an additional day or two and still meet Medicare law’s prompt payment requirements, others will begin processing claims immediately at the reduced rates.

Importantly, claims for services provided on or after April 1 will not be processed all at once; rather, they will be processed on a rolling basis, with claims for services provided earliest completed first and later claims held for as long as possible.  We fully expect that retroactive payment adjustments will be made for claims processed at the reduced rate.

Further details about procedures for retroactive claims adjustments and implications of the payment cuts for patient co-payment amounts will be shared as they become available.

Senate debate on payment extension continues

The Senate returned from its recess on Monday, April 12, 2010, to again consider H.R. 4851, the Continuing Extension Act of 2010.  That legislation, as passed by the House, would avoid the 21.3 percent Medicare physician payment cut by extending 2009 rates through the end of April, as well as other expiring programs such as extended unemployment and COBRA benefits for individuals who have lost their jobs.  The Senate failed to pass H.R. 4851 before the recess due to controversy over its designation as an emergency measure that would not require budgetary offsets.

Yesterday, April 14, 2010, the Senate cleared a procedural hurdle by rejecting a point of order that would have stripped the bill of its emergency designation.  Senator George Voinovich (R-OH) crossed party lines and joined with Democrats to defeat the procedural motion by a vote of 60-40.  The vote also waived the budgetary point of order against an amendment offered by Senator Max Baucus (D-MT) that would further extend the reprieve against the Medicare payments through the end of May.

Those Senators who object to designating H.R. 4851 as an emergency measure may continue to take advantage of the many procedural hurdles available in the Senate to delay its passage, so debate may extend to or beyond the weekend.  Further, passage of the Baucus amendment or any other changes would require the measure to be approved again by the House.

The Senate and House are expected to complete action by the end of this week to enact legislation that retroactively restores Medicare payment levels to where they were on March 31, and extend 2009 payment rates through May 31.


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