 Claims Processing Information for Practices Regarding the 21% Cut to Medicare Physician Payments Effective April 1

Since the Senate did not act to repeal and replace the SGR before adjourning last week, all Medicare physician services provided on or after April 1 will be subject to a 21% cut from the SGR. The Centers for Medicare & 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. Holding claims for a short period of time allows CMS to implement any subsequent Congressional action while minimizing claims reprocessing and disruption of physician cash flow in the event of legislation addressing the 21% payment cut.

The 10-business-day 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.

In the meantime, some practices are asking what they should charge. By law, Medicare is required to pay physicians the lesser of the submitted charge or the Medicare approved amount. For this reason, the medical community is advising against submitting claims with reduced amounts reflecting the 21% cut. Instead, we recommend physicians either continue charging the current 2015 rates for April dates of service, or defer submitting claims until after final action on the legislation. In the unexpected event that Congress allows the 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 limits.

CMS has indicated that it will provide additional information before April 11.