San Francisco Medical Society Blog

Medicare MAC Contract Protest Update

Mon, 29 Apr 2013 10:23:10 GMT

The U.S. Court of Federal Claims has denied two protests that were filed challenging a decision by the Centers for Medicare and Medicaid Services (CMS) to award the Medicare Administrative Contractor (MAC) contract for Medicare Parts A and B in Jurisdiction E to Noridian Administrative Services.

CMS and Noridian will now move forward to implement the new contract and expects this process to complete by mid-September 2013. SFMS/CMA has and will continue to work closely with CMS and the new contractor to ensure a smooth transition.

Jurisdiction E (previously called Jurisdiction 1) covers California, Nevada and Hawaii, as well as the U.S. territories of American Samoa, Guam and the Northern Mariana Islands. Jurisdiction E includes over 3.5 million Medicare fee-for-service beneficiaries, 500 Medicare hospitals and 86,500 physicians. MACs process Part A and Part B claims and perform other critical Medicare operational functions, including enrolling, educating and auditing Medicare providers.

CMS Confirms Sequestration Payment Cuts for EHR Incentive Program

Thu, 18 Apr 2013 16:21:55 GMT

The Centers for Medicare & Medicaid Services (CMS) has confirmed that the Medicare electronic health record (EHR) incentive program payments will be cut by 2% as required by the Sequestration Transparency Act.

The 2% "sequestration" cuts to Medicare are part of the $1.2 trillion in cuts required by the Sequestration Transparency Act, part of a deal worked out to end last year's debt-ceiling crisis.

According to CMS, the 2% reduction will be applied to Medicare EHR incentive payments for reporting periods that end on or after April 1, 2013. If the final day of the reporting period occurs before April 1, 2013, those incentive payments will not be subject to the reduction.

Medicaid (Medi-Cal in California) is exempt from the sequestration cuts.

Click here for more details on the sequestration cut as previously reported by SFMS.

Click here for our Sequestration FAQ.

Medicare Claim Hold

Mon, 01 Apr 2013 18:03:21 GMT

The Centers for Medicare & Medicaid Services (CMS) has identified technical issues with certain parts of the April 2013 quarterly systems release. The problem impacts claims received by the Medicare contractors (Palmetto GBA for California) on or after April 1, 2013.

The issues affect:

1. All claims for assistant-at-surgery services

2. All Ambulatory Surgical Center claims

As a result of the system issues, CMS has instructed Medicare contractors to hold these types of claims until April 14, 2013, when system fixes are expected to be implemented.

Physicians should see minimal impact on the timeliness of these claims and their cash flow, as current law requires electronic claims to be held 14 calendar days, and paper claims for 29 days after the date of receipt.

Click here to view the official CMS notice.

CMS Approves Medicare/Medi-Cal Duals Project

Thu, 28 Mar 2013 17:28:13 GMT

The Department of Health Care Services (DHCS) announced that the federal Centers for Medicare and Medicaid Services (CMS) has given approval to the project to require Medicare/Medi-Cal dual eligibles to enroll in a managed care plan. The project, which was previously known as the “Coordinated Care Initiative,” will now be called CalMediConnect.

Size and Scope of the Project

The project will begin no sooner than October 1, 2013 and will impact approximately 450,000 duals in eight counties—Alameda, Los Angeles, Orange, Riverside, San Diego, San Mateo, San Bernardino, and Santa Clara. As a result of intensive SFMS/CMA advocacy, enrollment in Los Angeles County will be capped at 200,000 people.

Duals should receive their first notices about the transition in July 2013, with enrollments set to begin in October. How quickly enrollment happens will vary by county, from three months in San Mateo to 15 months in Los Angeles. In all other counties, the time frame will be 12 months.

Although patients will be passively enrolled, they will be able to opt out for their Medicare benefits at any time. There will be no lock-in period.

Continuity of Care Provisions

Under the terms of the MOU, duals who do enroll in managed care for their Medi-Cal and Medicare benefits will be able to continue seeing an existing Medicare provider for up to six months, even if that physician is not contracted with the health plan. Payment for the services will be at Medicare rates.

Also, in urgent or emergent situations, plans will be required to pay out-of-network providers at Medicare rates. This is a provision that SFMS/CMA fought for in the bill to protect physicians, especially those in emergency rooms.

Network Adequacy

SFMS/CMA is pleased that the plan includes extensive network adequacy and financial solvency requirements for the participating plans. This, again, was something we have fought for in the legislative process.

Next Steps

Now that DHCS and CMS have finalized their MOU, they will be jointly negotiating with health plans on a three-way contract. As noted above, duals should be receiving notifications about the change in July.

Medicare Ordering/Referring Claims Denials to Take Effect May 1

Wed, 27 Mar 2013 15:33:01 GMT

Medicare will begin denying claims on May 1, 2013, if the ordering/referring provider listed on the claim is not in the Provider Enrollment, Chain and Ownership System (PECOS), the database Medicare uses to track physicians and other providers.

If you bill Medicare, you are encouraged to note any Medicare EOBs with the remittance code N264 and/or N265, which may indicate that the ordering/referring provider on the claim is not yet in PECOS. These providers must take action to enroll in PECOS or future claims that you submit with these providers listed for dates of service on or after May 1 will be rejected.

Physicians and other providers are not required to enroll with Medicare to provide services in order to be listed in PECOS. Physicians who wish to be listed in PECOS solely for ordering/referring purposes may submit an enrollment application online via the PECOS website or by completing a CMS-855o paper enrollment application.

Click here to access the PECOS system to determine if you or another physician is currently enrolled in PECOS.

Click here to download a paper CMS-855o application.

Click here for the MLN Matters article for details about the update on PECOS and ordering/referring.

Update on Medicare MAC Contract Protest

Fri, 15 Mar 2013 11:47:36 GMT

The Centers for Medicare & Medicaid Services (CMS) announced in September 2012 that Noridian has been named the new Medicare Administrative Contractor (MAC) for Medicare Parts A and B in Jurisdiction E (previously called Jurisdiction 1). Two protests were filed challenging the award.

On January 18, 2013, the Government Accountability Office denied the two protests. As permitted by law, both protestors (Palmetto GBA and CGS) subsequently filed complaints with the U.S. Court of Federal Claims challenging the Jurisdiction E MAC contract award. The protests were filed on February 1, 2013. The Department of Justice is representing CMS before the court.

For at least the next several months, Medicare providers in Jurisdiction E (California, Hawaii, Nevada and the Pacific territories) will continue to file their Medicare claims with the incumbent Palmetto GBA.

CMS will notify affected Medicare providers about the situation, including any implementation dates, following the Court of Federal Claims review.

Jurisdiction E includes over 3.5 million Medicare fee-for-service beneficiaries, 500 Medicare hospitals and 86,500 physicians. MACs process Part A and Part B claims and perform other critical Medicare operational functions, including enrolling, educating and auditing Medicare providers.

Sequestration Means 2% Medicare Cut to Health Care Providers Effective 4/1

Wed, 06 Mar 2013 10:50:25 GMT

Across-the-board federal budget cuts were triggered on March 1 because Congress failed to come to an agreement on how to reduce the federal deficit. Although it is still possible that Congress will reach some sort of a compromise before most of the cuts take effect on April 1, physicians should prepare for a 2% reduction in reimbursement from the Medicare program beginning in April.

The 2% Medicare "sequestration" cuts are part of the $1.2 trillion in cuts required by the Sequestration Transparency Act, part of a deal worked out to end last year's debt-ceiling crisis. The cuts are evenly split between defense spending and discretionary domestic spending. The mandatory Medicare cuts will result in a savings of $11 billion in 2013. Medicaid is exempt from the cuts.

The Medicare cut will impact physicians, hospitals, other health care providers, health plans, and prescription drug plans but will not directly impact beneficiaries.

Although the 2% cut is lower than the reductions in other federal agencies, physicians said it will still have a significant impact. Dr. Jeremy Lazarus, president of the American Medical Association, said that the cut comes at an especially bad time because physician payment rates have risen only about 4% over the last decade or so while the cost of caring for patients has climbed by more than 20%.

"A 2% cut erases half of what’s been gained over the past 12 years and continues to widen that gap between what Medicare pays and what it actually costs to care for patients," Dr. Lazarus said. "This is on top of the yearly concerns about even larger cuts that we’ve been going through over the last decade."

The cuts, and the back-and-forth in Washington over sequestration, add to physicians’ general concerns about the instability of Medicare payments, Dr. Lazarus said. That could lead some physicians to stop accepting Medicare patients.

"It’s a very difficult time to plan your practice and plan hiring new employees because you don’t understand what you’re going to be getting paid and what you can afford," said Dr. David L. Bronson, president of the American College of Physicians.

Click here to view the Sequestration FAQ and the impact on California physicians.

Source: Internal Medicine News, Mach 4, 2013.

California Heavily Affected by Looming Sequester Cuts

Mon, 25 Feb 2013 11:07:30 GMT

The White House detailed how California and other states would be affected if a deal is not reached by Friday to avoid automatic cuts under sequestration.

The automatic cuts involve nearly $1 trillion in across-the-board reductions over a decade, including a 2% reduction to Medicare reimbursement rates.

If the sequester cuts go through as expected, Obama administration officials and experts estimate that California would lose about $670 million annually in federal grants, as well as $3.3 billion in military and defense revenue.

Health and human services-related cuts in California would involve the loss of:

$12.4 million in grants to prevent and treat substance use disorders;
$2.6 million in funds to help improve the state's response to public health threats;
$2 million in funds for the California Department of Public Health, resulting in 49,300 fewer HIV tests; and,
$1.1 million in funds for vaccines, resulting in 15,810 fewer children receiving immunizations.

Although it is unlikely that federal lawmakers will reach a deal by March 1, they are expected by Wednesday to hold votes on competing measures to avoid sequester.

A plan by Senate Majority Leader Harry Reid (D-Nev.) would delay the cuts until January 2014, replacing them with a mix of $110 billion in new tax revenue and more narrowly tailored spending cuts.

Meanwhile, a plan by Senate Minority Leader Mitch McConnell (R-Ky.) still is being developed. Officials say McConnell’s plan might leave the sequester in place but allow for more flexibility among agencies in implementing the cuts.

Source: California Healthline, February 25, 2013.

Bowles, Simpson Unveil Deficit-Reduction Plan Includes Hefty Cuts for Health Care

Wed, 20 Feb 2013 14:21:56 GMT

Erskine Bowles and former Sen. Alan Simpson (R-Wyo.)—former co-chairs of President Obama’s deficit-reduction commission—unveiled a $2.4 trillion deficit-reduction proposal, which includes $600 billion in federal entitlement savings over a decade, in hopes of staving off the automatic cuts under sequestration that take effect on March 1.

The automatic cuts involve nearly $1 trillion in across-the-board reductions, including a 2% reduction to Medicare reimbursement rates. The Simpson-Bowles proposal would replace and double the savings in the sequester, on top of the $2.7 trillion in deficit reduction enacted by the fiscal cliff legislation Obama signed in January.

The plan would achieve the $600 billion in Medicare and Medicaid savings by decreasing provider payments, raising premiums for higher-income beneficiaries, reducing prescription drug costs, and making “adjustments to account for an aging population.” The plan also includes $600 billion in savings from tax code reforms and eliminating tax breaks, with the remaining savings coming from a mix of mandatory spending cuts and stricter limits on discretionary spending.

Simpson and Bowles indicated they will unveil a more detailed plan in the coming weeks, after lawmakers have had a chance to review and comment on their proposal. The plan is more ambitious than the $1.5 trillion in savings Obama called for in last week’s State of the Union address but is significantly smaller than the estimated $4 trillion House Republicans are seeking to reduce the deficit over a decade.

Source: California Healthline, February 20, 2012.

Palmetto GBA Loses Protest for Medicare Contract

Tue, 22 Jan 2013 14:49:05 GMT

On January 18, 2013, the Government Accountability Office (GAO) announced that they denied Palmetto’s protest, awarding the Medicare contract for Jurisdiction E (previously referred to as J1) to Noridian Administrative Services. Noridian and Palmetto are awaiting further direction from CMS on the transition plan, including a transition date.

SFMS/CMA will work closely with them to help ensure a smooth transition. Until further direction is received, members should continue with business as usual.

Organized Medicine Advocate for Delay in Meaningful Use Rules

Wed, 16 Jan 2013 14:51:07 GMT

Leading medical groups have called on the Department of Health and Human Services (HHS) to delay implementation of Stage 3 of meaningful use of electronic health records (EHRs), saying providers are still trying to implement Stages 1 and 2.

"Meaningful use" refers to provisions in the 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act, which authorized incentive payments through Medicare and Medicaid to clinicians and hospitals that use electronic health records in a meaningful way that significantly improves clinical care.

The American Medical Association, which called for a delay in implementation, said the meaningful use program has helped kick start EHR use but noted there are still technical, financial, regulatory, and operational challenges that must be dealt with first.

The American College of Physicians wrote in its comments that Stage 3 measures don't focus enough on patient outcomes, although that was supposed to be their goal. Instead, HHS' measures are a growing collection of functional metrics.

The Association of American Medical Colleges wrote that Stage 3 requirements should strike a balance between imposing difficult measures without having a negative impact on patient care for those providers who don't meet such measures.

In its comments on proposed Stage 3 requirements issued by HHS, the American Academy of Family Physicians called for a delay in implementation until at least 2017, adding it also wants to delay or eliminate penalties for the third and final stage of the EHR incentive program.

HHS finalized its regulations for Stage 2 in August, requiring that physicians complete that stage by October 1, 2014 or face a 1% penalty from Medicare. That was a 9-month delay from its original deadline.

A finalized Stage 3 rule should be released later this year.

Source: Medpage Today, January 15, 2013.

Palmetto Posts New 2013 Medicare Fee Schedule

Wed, 16 Jan 2013 14:03:27 GMT

California’s Medicare contractor, Palmetto GBA, has now posted the new fee schedule on its website and has begun processing 2013 claims. The rates reflect a one-year Medicare fee-for-service physician payment freeze, approved by HR 8 (American Taxpayer Relief Act) recently passed by Congress. Although the Centers for Medicare and Medicaid Services gave contractors instructions to hold claims for up to 10 days to allow time to implement the new fee schedule, there shouldn't be any noticeable impact for California physicians.

Physicians should be aware that the 2013 fee schedule may not be exactly the same as the 2012 fee schedule. Although Congress stopped the 26.5 percent SGR cut, there were other components of the fee schedule formula that affect payment that may have changed, such as the relative value units (RVUs).

Click here to view the new fee schedule.

AMA Update on Medicare Payment Rates

Thu, 03 Jan 2013 11:45:04 GMT

The American Taxpayer Relief Act of 2012 was signed into law January 2, 2013. The new law averts the 26.5% SGR cut for all of 2013 and the 2% sequester for the next two months. It also extends the work GPCI floor for a year. Today CMS released the attached announcement regarding updated 2013 Medicare payment amounts, claims processing, and reopening of the participation enrollment period.

Carriers are not expected to post the new rates on their web sites until at least next week and possibly later.

In the meantime, some practices are asking what they should charge. By law, Medicare is required to pay physicians the lesser of the submitted charge or the Medicare approved amount. For this reason, the SFMS is advising against submitting claims with the reduced 2013 amounts. Instead, we recommend physicians either defer submission of claims for 2013 dates of service until the new 2013 rates are published, or continue charging the 2012 rates.

In addition, due to relative value changes that will affect some 2013 payment amounts and limiting charges, for unassigned claims practices should probably wait to bill patients directly for cost-sharing amounts until the new 2013 rates are published.

Source: American Medical Association

Update: CMS Released Instructions to Contractors for Implementation of the Revised Fee Schedule

Thu, 03 Jan 2013 10:04:17 GMT

On January 3, the Centers for Medicare and Medicaid Services (CMS) released instructions to Medicare contractors for implementation of the revised fee schedule.

As we reported yesterday, Congress on January 1 passed HR 8, the American Taxpayer Relief Act, narrowly averting the so-called "fiscal cliff." The bill includes a one-year Medicare fee-for-service physician payment freeze, meaning the 26.5 percent sustainable growth rate (SGR) cut has been averted, for now.

In order to allow sufficient time to develop, test, and implement the revised 2013 Medicare physician fee schedule, Medicare contractors have been instructed that they can hold claims with January 2013 dates of service for up to 10 business days. CMS expects these claims to be released into processing no later than January 16, 2013.

The claim hold should have minimal impact on physician 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.

Based on prior history of similar fee schedule updates, SFMS/CMA believes that physicians may expect to see claims paid in approximately 21 days, rather than the usual 14 days.

According to CMS, Medicare contractors will be posting the new payment rates on their websites no later than January 23, 2013.

The 2013 fee schedule will not be exactly the same as the 2012 fee schedule. Although Congress stopped the 26.5 percent SGR cut, there were other components of the fee schedule formula that affect payment that may have changed, such as the relative value units (RVUs).

Physicians have the option of holding claims and submitting them after the new fee schedule is released. If you choose to submit claims in the interim, SFMS/CMA suggests that both participating and non-participating physicians bill their usual and customary fees-for-services to Medicare. Billing at your customary fee ensures that Medicare pays the highest amount possible when the claim is processed.

Source: California Medical Association, December 03, 2013.

Congress Stops Medicare Cuts for One Year as Part of Fiscal Cliff Legislation

Thu, 03 Jan 2013 09:49:59 GMT

Congress on January 1 passed HR 8, the American Taxpayer Relief Act, narrowly averting the so-called "fiscal cliff." The bill includes a one-year Medicare fee-for-service physician payment freeze, meaning the 26.5 percent sustainable growth rate (SGR) cut has been averted, for now. The 2 percent sequestration cuts have also been deferred for two months.

The one-year fix comes with a $25 billion price tag. The cost of physician payment reform has been growing over the years as Congress continues to enact frequent short-terms fixes. As recently as 2005 the cost of permanent reform would have been $48 billion, but today it is estimated to be nearly $300 billion over the next 10 years. If action is not taken soon, the cost will continue to escalate to $500 billion in only a few short years.

The one-year freeze will be paid for with cuts to the Affordable Care Act's (ACA) new CO-OP program and other health care programs ($15 billion of the cuts impacting hospitals). At SFMS/CMA's urging, the ACA's Medicaid increase for primary care physicians was not used to pay for this temporary fix, despite earlier attempts to do so.

The Medicare fix is being paid for by:

Cuts to the ACA's CO-OP program (unobligated funds)
Extending the statute of limitations for recouping overpayments.
Adjusting the equipment utilization rate for Advanced imaging services.
Rebasing end stage renal disease payments based on utilization of drugs.
Equalizing stereotactic radiology hospital outpatient services with physician services.
Rebasing of Disproportionate Share Hospital payments.
Reducing multiple procedure payments when more than one therapy procedure is provided on the same day.
Eliminating funding for the Medicare improvement fund.
Eliminating the ACA long term care (LTC) CLASS act. (But establishes a LTC commission.)
Adjusting Medicare Advantage payments to account for differences in coding practices between fee-for-service and managed care risk adjustment formulas.

Importantly, the bill also lays the groundwork for an alternative Medicare payment system by establishing data systems and a registry for reporting on quality that will help physicians.

What does this mean for physician claims?

Because federal law requires Medicare contractors to hold claims for 14 days before releasing payment, there should be little if any impact on physicians' cash flow. Although there has been no official word from the Centers for Medicare and Medicaid Services, claims for services provided in the early days of 2013 will likely be processed under the new 2013 fee schedule. Palmetto, California's Medicare contractor, should have the new fee schedule posted on its website in about 10 days.

Physicians have the option of holding claims and submitting them after the new fee schedule is released. If you choose to submit claims in the interim, SFMS suggests that both participating and non-participating physicians bill their usual and customary fees-for-services to Medicare. Billing at your customary fee ensures that Medicare pays the highest amount possible when the claim is processed.

Additional details will be provided as they become available.

CMS Forced To Implement 26.5% Medicare SGR Rate Cut

Fri, 21 Dec 2012 11:49:35 GMT

The Centers for Medicare & Medicaid (CMS) issued a statement on Wednesday morning that because of Congressional inaction the agency will be forced implement the Medicare sustainable growth rate (SGR) formula cut of 26.5 percent beginning January 1, 2013.

If Congress does adjourn without addressing the payment cut, CMS has said it will follow normal claims processing procedures. That is, claims will not be held and Medicare carriers will process payments for physician services provided after December 31 under the normal 14-day cycle required by law. Payment for these claims would be based on the new, lower fee schedule conversion factor of $25.0008, as opposed to the current rate of $34.0376.

The California Medical Association (CMA) has spoken with California leadership in Congress to confirm that the fiscal cliff negotiations have broken down. There is also no agreement within Congress to pass a stand-alone SGR bill.

Both Republican and Democratic leaders understand that physicians cannot sustain a 26.5 percent Medicare payment cut, but it is now caught up in the politics of the “fiscal cliff.” It is critical that physicians keep contacting their members of Congress to demand action.

In addition to the SGR cut, physicians are facing a potential two percent "sequestration" cut. The sequestration cuts are part of the $1.2 trillion in cuts required by the budget deal worked out to end last year's debt-ceiling crisis.

Ultimately, CMA does not think Congress will allow the cuts to go forward on any long-term basis. At this time, it is impossible to predict whether the 112th Congress will find a way to pass a stop-gap measure before adjourning, how long such a measure would last, or how long payment cuts will be in effect until legislation can be passed after the 113th Congress convenes in January.

It is inexcusable that Congress is once again putting Medicare patients and the practices of physicians who provide them needed health care at significant risk.

“The health care delivery system is going to see an influx of patients in the next 18 months,” said Dr. Phinney. “We simply cannot continue to cut resources while adding more patients. The result will be millions of patients with insurance coverage, unable to see a physician. This is especially true in California, where we are also battling cuts to the state’s Medicaid program at the same time.”

The financial disruption this situation will cause for physicians and their practices is unacceptable. CMA will continue to fervently convey this message in the strongest possible terms to Congress and the Administration. Our grassroots network has been activated, and we are seeking your voices to tell Congress just how deeply its inaction will affect you.

Despite these efforts, CMA feels compelled to advise physicians to start making plans to mitigate this disruption and meet their own financial obligations in January. Given the potential impact on practice revenue in early January, physicians should be certain that adequate arrangements are in place to sustain their practices. For those physicians who are forced into the untenable position of limiting their involvement with the Medicare program because it threatens the viability of their practices, we urge that patients be notified promptly so that they, too, can explore other options for obtaining needed medical care.

Physicians should also be aware that they have until Dec. 31, 2012, to make changes to their Medicare participation status for 2013.

CMA will remain engaged throughout the holidays and keep you informed of any new developments.

Call Now!

Contact your members of Congress and urge them to work together to stop the Medicare payment cuts before they take effect on January 1, 2013.

To contact your members of Congress, use AMA’s grassroots hotline,(800) 833-6354. You will be asked to enter your ZIP code and select your Representative. Please select your Representative first, then call back to connect with Senators Boxer and Feinstein.

Source: California Medical Association, December 20, 2012.

SGR Advocacy Alert

Wed, 19 Dec 2012 14:47:46 GMT

The negotiations between Speaker Boehner and President Obama on the Lame Duck tax and deficit reduction package are at an impasse. There is a very real threat of the 26.5 percent Medicare physician payment cut taking effect on January 1, 2013, at least temporarily.

If Congress does adjourn without addressing the payment cut being induced by the sustainable growth rate (SGR) formula, the Administration announced today that the Centers for Medicare and Medicaid Services will follow normal claims processing procedures. That is, claims will not be held and Medicare carriers will process payments for physician services provided after December 31 under the normal 14-day cycle required by law. Payment for these claims would be based on the new, lower fee schedule conversion factor of $25.0008, as opposed to the current rate of $34.0376.

At this time, it is impossible to predict whether the 112th Congress will find a way to pass a stop-gap measure before adjourning, how long such a measure would last, or how long payment cuts will be in effect before legislation can be passed after the 113th Congress convenes in January. It is highly unusual for a new Congress to enact significant legislation in the first month of its session, but the circumstances facing our nation today are far from typical.

It is inexcusable that Congress is once again putting the 47 million Medicare patients and the practices of physicians who provide them needed health care at significant risk. The Medicare program has become unreliable and its instability undermines efforts by physicians to implement new health care delivery models that stand to improve value for seniors and other beneficiaries through better care coordination, chronic disease management, and keeping patients healthy.

We believe that the financial disruption this situation will cause for physicians and their practices is unacceptable, and we will continue to fervently convey this message in the strongest possible terms to Congress and the Administration, as we have for the past several weeks. We are working with CMA and AMA physician grassroots networks, and are seeking your voices to tell Congress just how deeply its inaction will affect you.

Despite these efforts, at this time we feel compelled to advise physicians to start making plans for steps they can take to mitigate this disruption and meet their own financial obligations in January, in case the 26.5 percent cut actually takes effect. Given the potential impact on practice revenue in early January, physicians should be certain adequate arrangements are in place to sustain their practices. For those physicians who are forced into the untenable position of limiting their involvement with the Medicare program because it threatens the viability of their practices, we urge that patients be notified promptly so that they, too, can explore other options to seek health care and medical treatment.

We will remain engaged throughout the holidays and keep you informed of any new developments.

From CMS Region 9 (San Francisco Regional Office): Information Regarding the 2013 Medicare Physician Fee Schedule

Wed, 19 Dec 2012 14:20:03 GMT

The negative update of 27% under current law for the 2013 Medicare Physician Fee Schedule is scheduled to take effect on January 1, 2013.

Medicare Physician Fee Schedule claims for services rendered on or before December 31, 2012, are unaffected by the 2013 payment cut and will be processed and paid under normal procedures and time frames.

The Administration is disappointed that Congress has failed to pass a solution to eliminate the sustainable growth rate (SGR) formula-driven cuts, and has put payments for health care for Medicare beneficiaries at risk. We continue to urge Congress to take action to ensure these cuts do not take effect. Given the current progress with the legislation, CMS must take steps to implement the negative update.

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 will notify you on or before January 11, 2013, with more information about the status of Congressional action to avert the negative update and next steps.

California’s Dual Eligibles Initiative Under National Spotlight

Thu, 06 Dec 2012 12:33:45 GMT

Patient advocates across the nation are closely watching California’s transition of beneficiaries eligible for both Medicare and Medi-Cal from traditional fee-for-service plans to managed care plans.

The California initiative is in its second year. State officials seek to transfer so-called dual eligibles to managed care plans to improve their health care services and reduce costs.

The state has estimated that the initiative will save $663 million next year and that it will yield additional savings in subsequent years. Federal officials have begun implementing a similar national effort under a provision in the Affordable Care Act.

Howard Kahn—CEO of L.A. Care, the largest public health plan in the U.S. with one million members in Los Angeles County—said the California initiative allows health plans to organize all of the care that dual eligibles receive and curb unnecessary treatments. However, some patient advocates who have followed the California initiative wonder if the federal demonstration project will put patients at too great a risk.

A report released by the California HealthCare Foundation in August 2012 determined several problems with the transition, such as:

A short timeline that allotted the state only seven months between federal approval and when enrollment began;
Privacy rules that prevent some health plans from receiving complete patient records;
Transfer guidance that confuses certain patients about whether their preferred physicians participate in various managed care plans; and,
An appeals process that patients seeking exemption from the program find onerous.

According to Kaiser Health News, California's initiative has caused some patients to leave trusted physicians and others to start receiving generic drugs that they say are ineffective.

In addition, health experts have expressed concern that insurers participating in the initiative have little experience overseeing the long-term home care needs of certain dual eligible patients.

Source: California Healthline, December 6, 2012.

2013 Medicare Physician Fee Schedule Contains Good and Bad News

Wed, 07 Nov 2012 14:00:46 GMT

As SFMS reported last week, CMS released the final 2013 physician payment rule, which sets payment rates and related policies for next year.

Highlights from the 1,362-page ruling

Increase in payments for primary care—7% for family physicians and 3-5% for other primary care providers.
New “transitional care” CPT codes to reimburse physicians for coordinating patient care within 30 days following a discharge for a hospital or skilled nursing facility. Phone calls and other related care management activities can be billed for payment.
2-6% cut in Medicare fees for a number of specialties, including cardiology, nuclear medicine, ophthalmology, pathology, physical medicine, and vascular surgery.
Rules for value-based payment modifier to take effect in 2013 (using 2013 data) with groups of 100 or more physicians. The value modifier will reward physicians who successfully report on quality measures and spend less than the national average per Medicare patient, and penalize physicians with lower quality and higher costs.
Plans to streamline physician reporting programs (e.g., EHR meaningful use, Physician Quality Reporting System, eRx programs).

Click here to view the full ruling.

Looming Cuts

Physicians are still facing across the board Medicare payment cuts of nearly 30 percent, if Congress fails to act by the end of the year. The sustainable growth rate (SGR) is set to cut physician rates by 26.5 percent and the so-called “fiscal cliff” would drop payments another 2 percent under the sequestration agreement.

The sequestration cut is part of the part of the $1.2 trillion in cuts required by the Sequestration Transparency Act, part of a deal worked out in Congress to end last year’s debt-ceiling crisis. The SGR and sequestration cuts are both set to go into effect on January 1, 2013.

There is unanimous agreement in Congress that cuts of this magnitude would result in serious disruptions in care for the nation’s elderly and disabled populations, and cannot be allowed to occur. SFMS/CMA have been working with Congress to stop the SGR and the sequestration cuts during the lame duck session in December. We are also urging Congress to include a California Medicare locality update in the lame duck Medicare legislation.