Medicare Compliance & Reimbursement

The fruit of intensive lobbying by physician groups on Capitol Hill took formal shape Feb. 26, as the Centers for Medicare & Medicaid Services unveiled its Medicare payment rule for physicians.

This rule reflects the physician fee schedule fix that groups like the American Medical Association have been clamoring for, and turns the planned 4.4 percent pay cut into a 1.6 percent increase.

“The action CMS is taking today will ensure that the doctors who treat Medicare patients will see an increase in the payments they get for those services, rather than the reduction previously anticipated,” Health and Human Services Secretary Tommy Thompson says. “We commend Congress for giving CMS the authority to make these changes.”

“The corrections we have made to the formula will have a positive impact not only in 2003, but for future updates,” says CMS Administrator Tom Scully. “More importantly, this rule restores the confidence of physicians, and patients, that the federal government will be a fair partner in the Medicare program,” he claims.

The rate change took effect March 1 — but insiders fear there will be glitches. For example, claims with dates of service in January or February are supposed to be paid at 2002 rates — but if they’re submitted after March 1, they’ll be paid at the higher 2003 rates due to claims processing limitations.

That means payment adjustments will have to be made to collect these overpayments from physicians. CMS expects to be ready to make these adjustments in July.

So in July, physicians can expect their carriers to ask them for money, “recouping the overpayment of all January and February services submitted March 1 or later paid at the 2003 rate,” explains one industry insider.

Further, what this all means in terms of the impact on beneficiary copayments is still murky. CMS recognizes that beneficiaries will be paying too much on their copays for these January and February claims processed after March 1 as well, but isn’t sure how to handle the problem just yet, the observer reports.

The whole situation will be an administrative nightmare for physician practices, but CMS has offered a way to avoid it.

The agency has suggested that physicians hold all the claims from January and February that they have not sub-mitted by March 1 and submit them after July 1.

That will ensure CMS pays the claim correctly, but it obviously presents the problem of practices having to sit on a bunch of claims for up to seven months.

Because of the change in payment rates, CMS is giving physicians extra time to decide whether to participate in Medicare. They now have until April 14.