AAFP Provides Members With Medicare Options as Payment Cuts Loom

December 19, 2012 05:25 pm News Staff
[Man standing on dollar bill tower]

To date, Congress and the White House have failed to reach an agreement to avert Medicare payment reductions scheduled to take effect on Jan. 1 and 2. In response, the AAFP has updated its information on physician options for participating in the Medicare program and is sending a letter to members on Dec. 20 directing them to the updated Medicare participation information.

Without congressional intervention, physicians face a 26.5 percent reduction in the Medicare physician payment rate on Jan. 1 as a result of the sustainable growth rate (SGR) formula. The Budget Control Act's sequestration provision calls for an additional 2 percent cut on Jan. 2 unless Congress and the White House can reach an agreement to avoid the so-called fiscal cliff.

Members should review the information on Medicare participation before making a decision on their current and future status with the Medicare program, says AAFP President Jeff Cain, M.D., of Denver, in the letter to members.

CMS Prepares Contractors to Implement Medicare Physician Payment Cut

CMS is preparing to implement a 26.5 percent reduction in the Medicare physician payment rate on Jan. 1 because Congress has not yet passed legislation blocking the cut called for by the sustainable growth rate (SGR) formula.

In a Dec. 19 e-mail to physicians and other health care providers, CMS said, "The administration is disappointed that Congress has failed to pass a solution to eliminate the SGR formula-driven cuts and has put payments for health care for Medicare beneficiaries at risk." However, "Given the current progress with the legislation, CMS must take steps to implement the negative update."

The SGR formula calls for a 26.5 percent reduction in the Medicare physician payment rate on Jan. 1. Without congressional action to block the cut, CMS must reimburse physicians based on the 26.5 percent reduction for services provided on and after Jan. 1. Medicare claims for services provided before or on Dec. 31 are not affected by the 2013 payment cut and will be processed and paid as normal.

In its e-mail, CMS also reminded recipients that, "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 said it would send payees more information on congressional action and next steps on or before Jan. 11.

Physicians also are facing an additional 2 percent cut in the Medicare physician payment rate on Jan. 2 because of the Budget Control Act's sequestration provision. CMS has not issued any information regarding the possible 2 percent reduction.

Congress reconvenes on Jan. 3 and could pass legislation that reverses or delays the Medicare cuts.

"We are increasingly concerned that Congress will not take the necessary actions to prevent these cuts from being implemented next month. We want you to fully understand the negative impact these policies may have on your practice and what your options are. Please also consider the impact these actions may have on access to care for your patients," says Cain.

The letter also asks AAFP members to contact their legislators in Washington for a final push to prevent the reductions.

If enacted, the cuts will result in Medicare revenue reductions equal to $27,000 for the average family physician, according to an analysis conducted by the AAFP. Moreover, the average small group practice -- practices made up of three family physicians -- will experience an $80,000 dip in Medicare payments.

"These figures represent the average direct loss of revenue from Medicare only and do not reflect potential reductions from private payers that mirror Medicare payment policies in their fee schedules," Cain says.

During the past few months, the AAFP has launched a grass-roots campaign to block the reductions, sending letters to members of Congress and issuing Speak Out alerts to rally member opposition to the impending reductions. This includes a Dec. 11 letter urging Congress and the White House to protect and preserve the nation's primary care infrastructure during the current budget negotiating process by acting on five core principles that are vital to the current and future viability of primary care and family medicine.

In response, AAFP members have sent nearly 5,000 letters to their legislators reiterating the seriousness of the impending reductions. The AAFP is providing an additional Speak Out letter(www.capwiz.com) that gives AAFP members an opportunity to express their opposition to the cuts if they haven't done so already.

On Dec. 13, AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane, Wash., and leaders from other major physician organizations visited with House and Senate members from both parties to urge that they prevent the cuts and to share the negative effect the cuts would have on Medicare beneficiaries and family physicians.