President Obama signed June 25 a bill that temporarily rescinds the 21.3 percent Medicare pay cut for physicians that went into effect June 1 and replaces it with a 2.2 percent update through Nov. 30. The best part for coders is that claims submitted during June before this bill was signed will automatically be reprocessed at the new rate.

According to the Centers for Medicare & Medicaid Services (CMS), the new law establishes 2.2 percent update to the Medicare Physician Fee Schedule (MPFS) payment rates from June 1 through Nov. 30, 2010.  Medicare contractors have been instructed by CMS to discontinue processing claims at the negative update rates and to temporarily hold all claims after June 1 until the new rates are tested. CMS says it expects processing will resume by July 1.

A CMS e-mail issued to contractors June 25 said, “Claims containing June 2010 date of service which have been paid at the negative update rates will be reprocessed as soon as possible.”

A negative 23 percent update to the conversion factor will apply Dec. 1 unless Congress acts yet again to delay the Medicare pay cut for physicians or, daresay, resolve the problem once and for all.

The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 also establishes a data match between the Centers for Medicare & Medicaid Services (CMS) and the Internal Revenue Service (IRS) to allow CMS to identify providers with a history of tax fraud.

As written in the bill, the IRS may disclose to CMS tax return information with respect to a taxpayer who has applied to enroll, or reenroll, as a provider of services or supplier under the Medicare program. Information that may be shared includes:

• the taxpayer identity information with respect to such taxpayer
• the amount of the delinquent tax debt owed by that taxpayer; and
• the taxable year to which the delinquent tax debt pertains.

The bill also includes clarification of the three-day payment window, and extends the period for single-employer defined benefit plans to amortize certain shortfall amortization bases.

As the Senate continues to debate over how to pay for legislation that would at least temporarily prevent a 21.3 percent cut in Medicare physician payments, the hold the Centers for Medicare & Medicaid Services (CMS) put on claims expired June 17. Beginning June 18, contractors may process claims for services furnished on or after June 1 at the reduced rate.

According to an American Medical Association (AMA) eVoice Alert, however, CMS assumes Congress will ultimately pass the American Jobs and Closing Tax Loopholes Act (tax extenders bill) and make the physician pay fix retroactive to June 1.

Once Congress acts to avert the cut, the AMA says, contractors will automatically reprocess claims when a submitted charge is higher than the new rate. If a submitted charge is lower than the new rate, the physician should call the contractor.

The question is: When will Congress pass the legislation (HR 4213) and what will the new rate be?

Nobody knows the answer to either question at this point. From the moment the bill passed through the U.S. House of Representatives on May 28, the Senate has hacked away at provisions in an attempt to make it more affordable to tax payers.

According to the AMA, an amendment Senate Finance Committee Chairman Max Baucus (D-Mont.) introduced that would have afforded a 19-month reprieve from the scheduled Medicare payment cuts by providing a 2.2 percent update for the remainder of 2010 and an additional 1.0 percent update in 2011 was defeated. In a second substitute amendment, the Sustainable Growth Rate (SGR) relief provision was scaled back to a six-month, 2.2 percent update that would expire Nov. 30, 2010, after which the 21.3 percent cut originally scheduled for 2010 would take effect.

According to a BNA Daily Tax report, “Moderate senators from both parties said June 17 that Senate Finance Committee Chairman Max Baucus’s (D-Mont.) scaled-back version of the Senate’s tax extenders bill is still too expensive to get their support, leaving Senate leaders short of the 60 votes needed to advance the legislation.”

“I want to see it all offset, except for those things that are through an emergency,” Sen. Ben Nelson (D-Neb.) said, adding that an extension of unemployment insurance benefits and federal Medicaid funding to states—the only two provisions in the substitute that are not paid for—do not qualify as emergencies.

To which Baucus replied: “There are 100 senators. We need 60. There are lots of combinations. We’re working hard … We’ll get 60 votes. I can’t say exactly when, but we’ll get 60 votes.”

When and if that day comes, the revised bill will then have to be sent back to the U.S. House of Representatives for passage.

The U.S. House of Representatives and the Senate were unable to resolve their differences in the American Jobs and Closing Tax Loop Holes Act of 2010 (tax extenders bill) in time to further delay a 21.3 percent negative update to Medicare reimbursement rates for physicians. The long anticipated pay cut went into effect June 1, but stalling tactics may result in physicians getting paid more, not less, this year.

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President Barack Obama affirmed June 2 his continued support for a government-sponsored health insurance plan even though, he acknowledges, it may cause stalwart Republicans to put the brakes on his drive for health care reform legislation by October.

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