Medicare Delays Physician Pay Cut Until December

By: Justin Vaughn, MDiv, CPC
Director of Compliance

On June 25, 2010, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act, which provides for a six-month extension of the physician pay update.  The effect of this legislation is that, instead of a significant pay cut, Medicare physicians will now receive a modest 2.2% pay increase—to run through November 30, 2010.  

Previously, a scheduled 21% cut in Medicare physician payments went into effect on June 1.  The new law provides a rate update retroactive to that date.  On June 25, CMS instructed its contractors to hold all claims for services rendered after May 31 until the new 2.2% updated rates can be tested and loaded into the Medicare contractors’ claims processing systems.  CMS revealed that it expects to begin processing claims at the new rate no later than July 1.  Claims that had been paid at the reduced rates will be re-processed "as soon as possible," according to CMS officials.

This is good news for now, but continued vigilance is warranted.  We continue to urge our clients to make your views known to your representatives in Congress.  Thank you, and have a great week!

The information presented herein reflects general information that is current as of the date it is first published.  In light of changes that may occur in the health care regulatory and compliance environments, the author's presentation of this information and any general advice previously published might become outdated.  Please check with your individual legal and/or compliance advisor(s) prior to taking any significant actions based upon the information and advice presented.