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President Obama signed into law today a six-month "fix" to rates paid to physicians and non-physician practitioners under the Medicare Physician Fee Schedule (MPFS), thereby reversing the automatic 21 percent cut that applied to MPFS claims beginning June 1.
The legislation, which also includes a 2.2 percent increase to pre-June 1 MPFS rates, will expire Dec. 1, at which time Congress will once again need to act to prevent additional automatic cuts to MPFS rates. The "fix" applies retroactively to claims for services provided since June 1, the date that the lower rate took effect.
In order to make the "doc fix" budget-neutral, Congress used several revenue-raising offsets. The offsets include a provision preventing hospitals from retrospectively billing to unbundle payments for outpatient therapeutic services provided prior to date of enactment of the legislation, if the services were performed within 72 hours of a hospital admission and were unrelated to that admission. The law does not extend a temporary increase in Medicaid’s Federal Medical Assistance Percentage (FMAP), nor does it extend COBRA subsidies to laid-off workers, as proposed in earlier versions of "jobs" legislation.
CHA strongly supports the "doc fix" but is disappointed that Congress did not include the FMAP increase in the legislation. CHA believes the FMAP funds are essential to state budgets and critical to maintaining the integrity of a strong Medicaid program. CHA also disagrees with the revenue-raising provision that prevents hospitals from billing for services performed in the 72-hour admission window, and believes that cutting hospital reimbursement to "fix" physician rates is dangerous and inappropriate.
CHA will continue to work with the California congressional delegation to achieve an FMAP extension. The Centers for Medicare & Medicaid Services (CMS) has been processing June MPFS claims at the lower "unfixed" amount for approximately one week. The agency stated it will place an immediate hold on unprocessed claims until it has made system modifications necessary to update reimbursement software to recognize the newly authorized rate.
Once the system modifications have been made and validated, CMS and its contractors will begin reprocessing claims already paid under the lower rate. Once the claims have been reprocessed, CMS contractors will begin to process unprocessed claims under the new rate in the order they were received.
