Medicare will hold physician claims through June 17

Washington -- The Centers for Medicare & Medicaid Services on June 14 announced that it was instructing Medicare contractors to hold this month's physician claims for another three days to give lawmakers more time to act on legislation reversing a 21% pay cut.

When it became clear that Congress would not act in time to stop the cut from taking effect June 1, CMS said its contractors would hold claims for 10 business days. As that deadline neared, CMS extended the hold, this time through June 17.

That gives lawmakers more time to finalize legislation to retroactively eliminate the cut and raise Medicare physician pay through 2011. When CMS made its announcement on claims processing, Senate leaders were still working to move an amended House-passed bill against resistance from conservatives who don't want the patch to add to the federal deficit.

President Obama, in his June 12 weekly radio and Internet address, said the mostly Republican opposition is blocking a bill that is desperately needed now.

"I'm absolutely willing to take the difficult steps necessary to lower the cost of Medicare and put our budget on a more fiscally sustainable path. But I'm not willing to do that by punishing hard-working physicians or the millions of Americans who count on Medicare," Obama said. "That's just wrong. And that's why, in the short term, Congress must act to prevent this pay cut to doctors."

If both chambers of Congress have not sent a final measure to the White House for approval by June 17, Medicare contractors will start processing June claims at the reduced rate, as soon as they have tested their systems to handle the change.

CMS said the additional delay would ensure that claims are paid accurately and would eliminate the need for contractors to reprocess claims if congressional action occurs after payments already have started flowing at the reduced rate. Still, the additional hold means that physicians will wait longer to receive pay for any services they have provided since the beginning of the month.

"We understand that the delayed processing of Medicare claims may present cash-flow problems for some Medicare providers," CMS officials wrote in a June 14 e-mail. "However, we expect that the delay, if any, beyond the normal processing period will be only a few days."

Any Medicare cash-flow interruption can have major consequences for physician practices struggling to cover the costs of providing care, said AMA President J. James Rohack, MD, speaking to reporters from the Association's Annual Meeting in Chicago. Even if they eventually are paid at the full anticipated rate, some doctors may need to take out personal loans or even lay off staff to make ends meet.

"This really highlights the problem of CMS holding claims," Dr. Rohack said.