House Rejects Measure to Temporarily Block Medicare Pay Cut

Physicians Face 27.4 Percent Payment Reduction

December 20, 2011 05:00 pm News Staff

The U.S. House of Representatives today rejected a Senate-approved bill that would have temporarily blocked an impending Medicare payment cut. As a result, physicians now are facing a 27.4 percent Medicare payment reduction that is scheduled to take effect on Jan. 1.

"The AAFP is outraged that Congress failed to prevent the 27.4 percent Medicare physician pay cut mandated by current law," said AAFP President Glen Stream, M.D., M.B.I., of Spokane, Wash., in a prepared statement. "That failure has presented (Congress') elderly and disabled constituents a bitter holiday gift -- uncertainty about whether their physicians will be able to provide the services they need."

The Senate passed a two-month Medicare physician payment extension as part of a larger tax bill last week, approving a measure that would have blocked the payment cut for two months. However, the House, in a 229-193 vote, rejected the Senate measure, saying the bill failed to provide an adequate extension of certain provisions, including a federal payroll tax holiday, an extension of a year-old freeze of federal salaries and reform of the unemployment insurance system.

CMS Instructs Medicare Carriers to Temporarily Hold 2012 Claims

In response to an impending 27.4 percent cut in Medicare physician payments that is scheduled to go into effect on Jan. 1, CMS has issued guidance instructing Medicare carriers to hold payments until at least Jan. 17 to give Congress additional time to reach an agreement on Medicare payment.

In a statement to physicians and other health care professionals, CMS said it will instruct its Medicare claims administration contractors to hold claims containing 2012 services paid according to the Medicare Physician Fee Schedule, or MPFS, for the first 10 business days of January -- Jan. 1 to Jan. 17. According to CMS, "the hold should have minimal impact on provider cash flow because, under current law, clean electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt."

CMS noted that MPFS claims for services rendered on or before December 31 are unaffected by the 2012 claims hold and will be processed and paid under normal procedures and time frames.

House members approved a bill, on Dec. 13 that would have provided a 1 percent increase in the Medicare physician payment rate for the next two years. But to finance the two-year fix, the House bill would have repealed or scaled back programs in the Patient Protection and Affordable Care Act, including the Preventive Health Fund. This made the bill unacceptable to Senate Democratic leaders.

House leaders now have called for a conference committee to work out the differences between the House and Senate legislation. But Senate leaders already have adjourned for the holidays and are not expected to return until Jan. 23, well after the Jan. 1 cut goes into effect.

"Regardless of whether Congress will retroactively make up this devastating loss of practice income next year, federal lawmakers' failure to act will cause grave disruption in physician practices," said Stream. "Nearly one in four patients seen by family physicians is a Medicare beneficiary. For some family physicians, Medicare patients comprise as much as eight in 10 of their patients. No business can sustain such immediate and draconian cuts to (its) revenue."

The AAFP has repeatedly urged Congress to repeal the current Medicare payment system and to replace it with a specified payment rate for the next three to five years to give various demonstration programs and alternative health care delivery models enough time to generate sufficient data to determine which payment methods make the most sense from both a fiscal and a quality perspective.

"This annual agony over Medicare patients' access to care must end," said Stream. "Postponing a permanent solution is false economy. Putting elderly and disabled patients at risk of losing access to medical care is unconscionable."


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