CMS Prepares to Hold Medicare Provider Claims; Congress Fails to Pass Essential Legislation

May 28, 2010

Urgent action on a bill that includes a provision postponing the scheduled payment rate cuts to Medicare Part B providers, known as the SGR formula, has been delayed due to opposition to the high cost of the item. The Centers for Medicare and Medicaid Services (CMS), which administers the program, announced today that it will delay payment of claims to all Medicare Part B providers, including clinical social workers, effective with claims for services occurring June 1 and after.

Advocacy groups for Medicare beneficiaries and Part B providers, including NASW, have lobbied the House and Senate to avert a 21 percent cut in Medicare payment rates slated for June 1, 2010. Unfortunately, the provision contained in H.R. 4213 ran up against congressional plans for their Memorial Day recess. Before leaving today, House leaders are holding a vote on the bill, also known as the “extenders package,” but the Senate has already recessed and action on the bill cannot be completed until Congress returns on June 7. By then current SGR payment rates will have already expired. Furthermore, a final compromise package has not been reached and opposition from GOP members and many fiscally conservative Democrats remains strong. The controversy has prevented congressional leaders from assembling the majorities necessary for passage. 

To avoid disruption of services to beneficiaries and payment of claims to Medicare Part B practitioners, CMS today instructed its Medicare contractors to hold claims containing services for the first 10 business days of June.  The payment hold will affect Part B claims with dates of service June 1, 2010, and later.  CMS expects the hold will have a minimum impact on provider cash flow because clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt. Congress has previously delayed scheduled rate cuts in January, March and April of this year, (see NASW background here

The underlying extenders bill is a target of political confrontation. H.R. 4213 is intended to address a wide variety of economic needs beyond Medicare payments, including unemployment insurance extension, extended COBRA benefits for the unemployed, Medicaid fiscal relief for the States and other high profile tax items. A revenue source to pay for the delay of the SGR formula cut is just one disputed item in the bill. Disagreements over increasing the deficit and the tax and spending provisions have each generated controversy in the legislation. The Senate is expected to quickly consider its own version of H.R. 4213 when it returns on June 7th.