Medicare Payment Formula Update

On Saturday, the Senate voted to pass the Department of Defense Appropriations Act 2010, (which was already passed by the house earlier this month) which included a two month reprieve to the 21% Medicare physician payment cut. The President signed the provision on Monday and the new conversion factor, through February 28, 2010, will be the same as 2009, $36.0660. What will happen to the Medicare Physician Fee Schedule after this date is still under discussion in Congress.

A plan to hold Medicare claims for the first half of January 2010 is detailed below. It is yet to be seen how the extension of the 2009 Medicare Conversion Factor through the end of February will affect this plan.  Since this is a very important measure which affects the financial standing of Phymedco clients and health care practitioner’s throughout the nation we’ll continue to monitor this issue closely.

INFORMATION REGARDING HOLDING OF CLAIMS FOR SERVICES PAID UNDER THE 2010 MEDICARE PHYSICIAN FEE SCHEDULE (MPFS)

To the extent possible and in consideration of possible legislative changes, the Centers for Medicare & Medicaid Services (CMS) is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of health care services and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the Medicare physician fee schedule, beginning January 1, 2010. In this regard, CMS has instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule (MPFS) for the first 10 business days of January (January 1 through January 15) for 2010 dates of service. This should have minimum impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt. Meanwhile, all claims for services delivered on or before December 31, 2009, will be processed and paid under normal procedures.
　
After 10 business days, contractors will begin releasing held claims into processing under the fee schedule which implements current law. This, of course, could result in claims being processed with the negative 21.2 percent update. If a new law is enacted which changes the negative update effective January 1, CMS will correctly process claims under the new law and, if necessary, CMS is prepared to automatically reprocess most of those claims which have already been processed at the lower rate.　
　
Under the Medicare statute, Medicare payments to physicians and other affected providers are based upon the lesser of the actual charge or the MPFS amount. Providers who submit charges that are greater than the negative 2010 MPFS will automatically have their claims reprocessed.　 Physicians who submit charges that are equal to or less than the 2010 MPFS amount will need to request an adjustment. Submitted charges on claims cannot be altered without a request from the physician/provider.
　
To the extent possible, providers may hold claims in-house until it becomes clearer as to whether new legislation will be enacted or until cash flow becomes problematic. This will reduce the need for providers to reconcile two payments (i.e., the initial claim and the reprocessed claim), and it will simplify provider billings of beneficiary coinsurance and payment calculations for payers which are secondary to Medicare.

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