Medicare begins processing claims with 21 percent cut

15 April 2010
(Edited from AMA material)

On April 1, the second short-term reprieve from a 21.3 percent Medicare physician payment cut that was scheduled to take effect in 2010 expired, after the Senate failed to approve a House-passed bill that would have extended 2009 payment rates a third time, through the end of the month. The Centers for Medicare and Medicaid Services (CMS) subsequently instructed its contractors to refrain from processing physician claims at the reduced rates for 10 working days, anticipating that Congress would return from its spring recess and pass another short-term extension of 2009 rates and avoid implementation of the cut. Today, Medicare’s hold on physician claims officially expires. While some carriers have the capacity to hold claims for an additional day or two and still meet Medicare law’s prompt payment requirements, others will begin processing claims today at the reduced rates.

Importantly, claims for services provided on or after April 1 will not be processed all at once; rather, they will be processed on a rolling basis, with claims for services provided earliest completed first and later claims held for as long as possible. It is expected that retroactive payment adjustments will be made for claims processed at the reduced rate.

Further details about procedures for retroactive claims adjustments and implications of the payment cuts for patient co-payment amounts will be forthcoming upon additional clarification from CMS.