CMS takes steps to implement 27% cut

December 19, 2012



The Centers for Medicare and Medicaid Services (CMS) has begun taking steps to implement the 27% reduction in the 2013 Medicare Physician Fee Schedule that will take effect January 1 if Congress does not address the sustainable growth rate (SGR), according to an e-newsletter CMS sent to fee-for-service providers.

"The administration is disappointed that Congress has failed to pass a solution to eliminate the [SGR] formula-driven cuts and has put payments for healthcare for Medicare beneficiaries at risk," CMS said via the e-newsletter. "We continue to urge Congress to take action to ensure these cuts do not take effect."

The controversial Medicare physician payment formula requires payment increases to match gross domestic product growth. If expenditures exceed the target, then Medicare tries to recoup the difference by cutting physician reimbursement. The difference between targeted and actual spending on physician services accumulates, however, so that the postponed pay cuts grow larger every year. Congress has approved several short-term “patches” to the SGR over the years. If Congress doesn’t act, the 2013 payment cut will be 27%.

Medicare Physician Fee Schedule claims for services rendered on or before December 31 are not affected by the 2013 payment cut and will be processed and paid under normal procedures and time frames, according to CMS. Under current law, clean electronic claims are paid 14 calendar days or later after they are received, and paper claims are paid 29 or more days after receipt.

CMS says it will notify fee-for-service physicians by January 11 of any information about the status of congressional action to avert the negative update, and well as the next steps affecting claims.

Meanwhile, American Medical Association (AMA) President Jeremy Lazarus, MD, said that Congress' inaction amounts to a Medicare "game of 'political chicken' and could affect more than 47 million Medicare patients. The organization sent a letter to Congress today calling for immediate action to stop the cuts and stabilize the Medicare program for patients and physicians.

“The threat is real, and a cut of 26.5% is simply unsustainable," Lazarus said, also expressing disbelief that Congress could not reach a solution in a year.

“Payments to physicians who care for Medicare patients have been nearly frozen for a decade, while the cost of caring for patients has increased by more than 20%," Lazarus said, adding that patients covered by Medicare increasingly will find it difficult to access care.

“Patients who rely on Medicare, and the physicians who provide them with vital care and treatment, must contact Congress to tell them to act immediately to stop this looming crisis," he said.

“It is time to stop this broken cycle and move toward a Medicare program that ensures continued access and the best health outcomes for patients and a stable, rewarding practice environment for physicians,” Lazarus said.

x