Congressional Action May Come Too Late to Stop Medicare Payment Cut

Editor's Update:
As of 6 p.m. EDT, on April 14, the Senate had not yet taken up debate on the bill to delay the 21.2 percent Medicare payment cut that went into effect on April 1. A Republican point of order on a short-term unemployment benefits package left the legislation in limbo. Democrats had to schedule a revote on the point of order for later on April 14 before they could vote on the bill itself. AAFP News Now will continue posting updates as action on the bill continues.

Congress may not be able to reverse a 21.2 percent reduction in the Medicare physician payment rate before the cut actually begins to impact physician payments on April 15.

The Senate passed a procedural hurdle on April 13 on a bill that, if enacted, would provide a Medicare payment extension through the end of April and, effectively, reverse a 21.2 percent payment reduction that took effect on April 1 under the sustainable growth rate formula.

With the approval of the so-called cloture measure, the Senate now will begin its consideration of the bill reversing the payment reduction. But if opponents of the measure do not agree to shorten the time allocated for debate, the Senate may not be able to vote on final passage of the bill until late in the week, thus allowing the cut to take effect on April 15.

"The physician payment extension has been caught up in much larger issues of unemployment insurance and the federal deficit," said Kevin Burke, director of the AAFP Division of Government Relations. "But while Congress is mired in its partisan battles, family physicians are faced with drastically reduced payments now and administrative nightmares in the near future."

The House approved the Medicare extension bill on March 17. However, the Senate failed to pass the legislation before adjourning for a two-week recess on March 26, which permitted the 21 percent pay cut to take effect on April 1.

CMS, however, instructed its contractors to hold payments for services delivered after April 1 for 10 business days, or until April 14, with the expectation that Congress would reverse the cut before it actually took effect.

The measure providing a payment patch through April 30 is expected to pass, Burke said, shortly after which Congress will take up legislation to extend the current payment rate until Oct. 1. Both the House and the Senate have passed separate bills to accomplish this extension, and negotiations over how to pay for it have been ongoing.

The AAFP, meanwhile, has submitted a series of questions to CMS, asking, for example, if the deadline for participation or nonparticipation in Medicare for 2010 has passed.

In addition, with Congress not expected to approve the Medicare patch until the end of this week, there would be one or two days of claims processed at the reduced rate. That prospect prompted the AAFP to ask whether CMS plans to pay the difference between the reduced claims rate and the restored rate automatically or if physicians will have to resubmit their claims. The Academy also asked how should physicians handle the copayments they may have collected since April 1.

AAFP News Now will be closely tracking this ongoing issue, so be sure to check back for coverage of CMS' responses to the AAFP's queries and other developments.