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

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 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.

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 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.

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. 

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.