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How will SGR reform affect Medicare reimbursement?



April 15, 2015
Area(s) of Interest: Access to Care Advocacy Practice Management 

On April 14, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015. The law eliminates the 21 percent physician fee cut that was scheduled to take effect on April 1 as part of the Medicare sustainable growth rate (SGR). The Centers for Medicare and Medicaid Services (CMS) announced that it will immediately begin work to implement the new provisions of the law.


In preparation for the possibility that Congress might not act before the April 15 deadline, CMS had instituted a 10-business day processing hold for all impacted claims with dates of service beginning on April 1. While the Medicare administrative contractors (MACs) have been instructed to implement the rates in the new legislation, a small volume of claims will be processed at the reduced rate based on the negative update amount. CMS has asked the MACs to automatically reprocess claims paid at the reduced rate with the new payment rate.


The California Medical Association spoke with the California MAC, Noridian, and the numbers of physicians that will see a reduced rate were minimal (170 claims submitted on April 1 in 13 states). Claims submitted on April 2 were processed correctly at the levels in place since January 1. Noridian is working on automatically reprocessing claims received on April 1 that were processed at the lower rate with no action needed from physicians.


Physicians can expect to see a 0.5 percent increase in reimbursement update on July 1, and another 0.5 percent update on January 1, 2016.


Contact: Michele Kelly, (213) 226-0338 or mkelly@cmadocs.org.

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