President Obama on June 25 signed into law a bill that replaces the 21% Medicare physician payment cut with a 2.2% pay raise for 6 months.
The legislation (H.R. 3962) provides physicians with a 2.2% increase in their Medicare payments through Nov. 30. The change is retroactive to June 1, the date that the 21% cut officially went into effect. Officials at the Centers for Medicare and Medicaid Services held claims from June 1 to June 18 to give Congress time to reverse the cuts, but has been paying physicians at the lower rate since then.
Now that the pay cuts have been reversed, CMS has directed its contractors to stop processing claims at the lower rates and temporarily hold all claims for services provided on or after June 1. This delay will give contractors time to adjust their claims processing systems. CMS said it expects to begin processing claims at the increased pay rate no later than July 1.
Medicare will also begin reprocessing any June claims that were paid under the 21% cut. Physicians should not resubmit those claims, but may need to contact their local Medicare contractor to request an adjustment, according to CMS. Under the law, Medicare must pay physicians the lower of either their submitted charge or the Medicare Physician Fee Schedule amount. Claims with submitted charges at or above the new 2.2% increased rate will be automatically reprocessed.
While physicians welcomed the temporary reprieve, they remain dissatisfied with the lack of congressional action on a permanent solution to the recurring Medicare payment cuts. The American Medical Association noted that without further action from Congress, physicians will face a 23% cut in December that will increase to nearly 30% in January 2011.
“Congress is playing a dangerous game of Russian roulette with seniors' health care. Sick patients can't wait. Congress must replace the broken payment system before the damage is done and cannot be reversed,” Dr. Cecil B. Wilson, AMA president, said in a statement. “The baby boomers begin entering Medicare in 6 months, and if the physician payment problem isn't fixed, these new Medicare patients won't be able to find a doctor to treat them.”
The instability of the current payment system doesn't just affect Medicare, but will have a significant impact on the future success of health reform, according to the American Academy of Family Physicians. The Affordable Care Act calls on physicians to change their practices through the adoption of health information technology and new practice models, both of which require time and money to implement. “Physicians can't invest in change if they can't count on payment for their services,” Dr. Lori Heim, AAFP president, said in a statement.
President Obama is also urging Congress to come up with a permanent replacement for the Medicare physician payment formula.
Before signing the bill, the President released a statement saying that the practice of temporary payment patches was “untenable” and must end. On June 24, the House of Representatives passed H.R. 3962 by a vote of 417-1. The Senate approved the measure on June 18.