No Medicare SGR Fix Yet

Congress has failed to date to pass a fix to the current SGR reductions to Medicare physician fees that would occur on 1/1/12. That methodology would reduce Medicare reimbursement by almost 30% . The Senate passed a two month fix but House Leadership wants a one year payroll tax fix and SGR fix is a part of that broader package. We have reprinted below the notice from CMS Region IX indicating that they will hold Medicare claims for the first 10 business days of 2012 in the hope that a resolution is adopted.

Attention Health Professionals:  Information Regarding the Holding of 2012 Date-of-Service Claims for Services Paid Under the 2012 Medicare Physician Fee Schedule

The negative update under current law for the 2012 Medicare Physician Fee Schedule is scheduled to take effect on Sun Jan 1, 2012, eight business days from today.  Consequently, as on numerous occasions in the past, CMS will instruct its Medicare claims administration contractors to hold claims containing 2012 services paid under the Medicare Physician Fee Schedule for the first 10 business days of January 2012 (i.e., Sun Jan 1 through Tue Jan 17).  The hold should have minimal impact on provider 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. 

Medicare Physician Fee Schedule claims for services rendered on or before Sat Dec 31 are unaffected by the 2012 claims hold 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.

CMS will notify you on or before Wed Jan 11, 2012, with more information about the status of Congressional action to avert the negative update and next steps regarding the claims hold.

Medi-Cal 10 % Provider Rate Reduction

DHCS has notified provider groups that they intend to implement the 10% provider rate reduction retroactive to June 1, 2011. They indicated that by the end of this month they would be able to inform individual providers what the total amount of the recoupment would be and provide a schedule for the take backs to occur, i.e. not recouping the total amount in one check write. We will provide additional information as it becomes available.

In the meantime a lawsuit has been filed in federal court in an effort to block implementation of this reduction. A hearing is expected in early January. In a related matter the federal court did issue a tentative ruling earlier this week in favor of an injunction sought by the Ca. Hospital Association to block a similar 10% reduction in their rates. We will obviously keep you informed on these developments.