Congress has not acted to address 21.3% Medicare Physician Fee cut on June 1 -- CMS announces they will hold claims

CMS announces they will temporarily hold claims starting June 1st in case Congress fails to act.

Currently, neither the House of Representatives and the Senate have approved legislation to stop the pending 21.3 percent cut to physician Medicare payments, which will take effect unless final legislation is signed into law by June 1. Despite a proposal earlier this week calling for modest updates through the end of 2014, legislators ultimately scaled back many areas of the bill, including the Medicare physician payment provision, to reduce the overall cost of the bill. However, House members continued to object to the revised cost of the bill, making it unclear when the House would hold a vote.

It is not clear that Congress will be able to pass even another short temporary fix before June 1. To address this possibility, earlier today the Centers for Medicare & Medicaid Services (CMS) released the following statement:

The Continuing Extension Act of 2010, enacted on April 15, 2010, extended the zero percent (0%) update to the 2010 Medicare Physician Fee Schedule (MPFS) through May 31, 2010. The Centers for Medicare & Medicaid Services (CMS) believes Congress is working to avert the negative update scheduled to take effect June 1, 2010. To avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the MPFS, CMS has instructed its contractors to hold claims containing services paid under the MPFS (including anesthesia services) for the first 10 business days of June. This hold will only affect MPFS claims with dates of service June 1, 2010, and later.

This hold should have minimum impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt. Be on the alert for more information about the 2010 Medicare Physician Fee Schedule Update.