July 2010

A Polsinelli Shughart Health Care Update:

Cutting it Close - President Obama Signs Law Delaying Medicare Physician Payment Cut

On June 25, 2010, President Obama signed The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (the Act) into law. The Act provides a six-month delay of earlier legislation which, effective June 1, 2010, imposed a 21 percent reduction in reimbursement under the Medicare Physician Fee Schedule (MPFS). The Act also increases MPFS reimbursement by 2.2 percent through November 30, 2010.

The Act provides relief to some physicians who were already beginning to feel the enormity of the 21 percent cut prior to Congressional action. Due to the pending legislation, CMS had instructed Medicare Administrative Contractors to hold MPFS claims with dates of service of June 1, 2010, and later. However, CMS’s hold expired eight days prior to the Act becoming law and on June 18, CMS was mandated to begin making MPFS payments reflecting the 21 percent decrease in reimbursement. According to CMS, any paid claims reflecting the 21 percent reduction will be reprocessed as soon as possible.

According to information published on the CMS website, CMS expects to begin processing all new claims at the updated rate (reflecting the 2.2 percent increase) by July 1, 2010. Presently, Medicare payments to physicians and other providers paid pursuant to the MPFS are paid based on the lesser of the submitted charge on the claim or paid based on the MPFS amount. Consequently, any claims with June dates of service and charges that are greater than or equal to the new 2.2 percent updated rates will be reprocessed automatically. However, affected physicians and other suppliers who submitted claims with charges less than the 2.2 percent updated rate must contact their local Medicare Administrative Contractor and formally request an adjustment. CMS has instructed physicians not to resubmit any previously submitted claims. If physicians need to make any changes to already submitted claims or have any additional questions regarding payment, CMS recommends that they contact their local Medicare Administrative Contractor.

For More Information

If you would like more information, please contact Randal L. Schultz at 816-374-0512 or rschultz@polsinelli.com.

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