21.2 percent Medicare reimbursement cut in effect; CMS delays impact

The 21.2 percent cut in Medicare reimbursement officially goes into effect today, but the Centers for Medicare and Medicaid Services (CMS) issued a guidance Friday that will delay its effects for two weeks, or until the U.S. Senate acts on a bill delaying the cut.

"We believe Congress is working to avoid the negative update that will take effect March 1, 2010," the guidance states. "Consequently, CMS has instructed its contractors to hold claims containing services paid under the [Medicare Physician Fee Schedule] for the first 10 business days of March."

The U.S. House of Representatives last week passed H.R. 4691, the Temporary Extension Act of 2010, that will extend a number of federal programs or provisions. Under that legislation, the current Medicare payment rates would be extended through the end of March 2010.

But the legislation has been held up in the Senate by Sen. Jim Bunning, R-Ky., because the bill would not be covered by the PAYGO rule (requiring Congress to pay for legislation as it comes up) recently passed by Congress. The Congressional Budget Office has estimated the legislation will cost $10 billion and Bunning wants Congress to implement budget cuts in order to pay for it.

Sen. Jon Kyl, R-Texas, told “Fox News Sunday” yesterday that the Senate will pass the extension legislation, despite Bunning's objections.

In the meantime, CMS does not expect provider cash flow will be affected by the delay because of typical time lags between the time claims are submitted and paid.

Several provider groups blasted Congress for failing to avert the 21.2 percent cut before it went into effect today.

“The American Academy of Family Physicians (AAFP) is deeply angered at congressional failure to avert the mandated 21.2 percent Medicare physician pay cut,” said Lori Heim, MD, president of the AAFP, in a statement released Friday. “This inaction — in the face of virtually universal calls by the medical community and advocates for Medicare beneficiaries — has put elderly and disabled patients at risk of losing access to care and imposed potentially devastating fiscal hardship on physicians.”

"Our message to the U.S. Senate is stop playing games with Medicare patients and the physicians who care for them," said J. James Rohack, MD, president of the American Medical Association. "It is shocking that the Senate would abandon our most vulnerable patients, making them the collateral damage of their procedural games."

The House last November passed a bill that would rewrite the sustainable growth rate (SGR) formula for Medicare, which would eliminate the 21.2 percent Medicare reimbursement cut. The Senate has yet to act on a permanent SGR formula fix.