House Inaction Creates Impasse on Medicare Physician Payment Legislation

21.3 Percent Payment Reduction Remains in Effect

June 23, 2010 02:50 pm James Arvantes

Although the U.S. Senate passed a bill rescinding a 21.3 percent payment cut in the Medicare payment rate on June 18, the House has yet to act on the measure, allowing the cut to remain in effect and creating a complicated payment situation for physicians.

"Congress must stop harming patients and act on legislation that retroactively restores the 21 percent Medicare payment cut with a formula that provides stability to the system," said AAFP President Lori Heim, M.D., of Vass, N.C., in a prepared statement.

Heim also called on Congress to end "outrageous political games that put the health and welfare of millions of Americans at risk."

The 21.3 percent reduction technically took effect on June 1, but CMS told its contractors to hold off processing claims for the first 17 days of June to give Congress more time to approve a payment patch and, thus, avoid having to pay physicians at the greatly reduced rate. However, CMS was forced by law to instruct its contractors to start processing claims with service dates of June 1 and later at the reduced 21.3 percent rate starting on June 18. In its correspondence to contractors, CMS said, "held claims will be released and processed on a flow basis, first-in/first-out."

"If Congress changes the negative update date currently in effect, CMS is prepared to act expeditiously to make the appropriate changes to Medicare claims processing systems," said the correspondence.

The Senate-passed measure would provide a 2.2 percent increase in the Medicare payment rate until Nov. 30. It originally was part of a larger jobs and tax extenders bill, but Senate Majority Leader Harry Reid, D-Nev., stripped the Medicare payment provision out of the larger legislation, making it possible for the Senate to pass the payment patch separately with the unanimous consent of the senators.

Although House Speaker Nancy Pelosi, D-Calif., says she supports the Medicare payment patch, she is insisting that action be taken on the larger jobs and tax extenders bill, creating an impasse between the House and Senate leadership that has left the Medicare payment provision in limbo for the time being.

"This squabbling is intolerable," said Heim. "Political infighting over the Medicare physician payment fiasco has gone on far too long. It threatens access to care for elderly and disabled patients and for members of our armed services and their families. It seriously undermines physician confidence that Medicare will reliably pay for the services already rendered. It undercuts the foundation on which health care reform is to be built."

Kevin Burke, director of the AAFP's Division of Government Relations, said the current stalemate is "the result of how each chamber wants to pay for the spending in the bill."

"We will keep pressing the House and the Senate to recognize the damage -- in terms of credibility, as well as finances -- that this impasse creates for family physicians and their patients," Burke said.

He added, however, "We believe (the impasse) will be resolved soon."