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Senate delays vote on SGR until April, CMS to delay 21% cuts until mid-month



March 30, 2015
Area(s) of Interest: Advocacy Payor Issues and Reimbursement 

The U.S. Senate failed to take a vote to permanently fix the Medicare sustainable growth rate (SGR) formula and extend the Children’s Health Insurance Program (CHIP) last night and will take the measure up when it returns from a break on April 13. Majority Leader Mitch McConnell (R-KY) said shortly after the budget debate at 3 a.m. on the Senate floor, “It’s encouraging this passed the House with such a large bipartisan majority, and I want to assure we’ll move to it very quickly when we get back…I think there is every reason to believe it’s going to pass the Senate by a very large majority.”


The measure, a rare bipartisan achievement in a deeply divided Congress, was overwhelmingly approved on Thursday by the U.S. House of Representatives. The bill would create a new payment formula focused on the quality of care. To help pay for these higher rates, the bill would also impose higher premiums on wealthier Medicare beneficiaries and impose cuts on hospitals for post-acute care.


The California Medical Association (CMA) is pleased that both Senators Barbara Boxer and Diane Feinstein were prepared to support the legislation and applauds the landslide vote of 392-37 in the House. This momentum should propel the Senate to act quickly when they return from recess. CMA will continue to stay in touch with our Senators over the recess and monitor the situation closely. We will keep fighting until we achieve passage, because we are too close now to let this opportunity slip away.


Thanks to every California physician who called, emailed and met with our Congressional Representatives to secure their votes. We had an overwhelming vote of support from the California Congressional delegation.


Regarding payment for services between April 1-14: Physician services provided on or after April 1 will be subject to a cut of 21 percent. However, the Centers for Medicare and Medicaid Services (CMS) is instructing its carriers to “hold” for 10 business days any claims for services provided on April 1 and beyond, until legislation can be passed and signed into law that reverses the 21 percent cut. The 10-day business hold means that April claims will be held through Tuesday, April 14. Since no claims by law can be paid sooner than 14 calendar days from their receipt, this hold should have little practical impact on Medicare remittance in the short-term, although billing for copayments and claims reconciliation will be more complicated.


CMA and American Medical Association are advising against submitting claims with reduced amounts reflecting the 21 percent cut. 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, 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.


In the unexpected event that Congress allows the 21 percent cut to take effect, Medicare would pay physicians at the reduced amount no matter what the physician billed and no further action would be necessary. However, non-participating physicians who have collected balance billing amounts for unassigned claims based on the currently-allowed amount could be required to make refunds to their patients based on new, lower balance billing amounts.

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