Practice Management Alert

Billers and physicians who were hoping that Congress would step in and make a last-minute 2008 decision to freeze the proposed 10.1 percent Medicare cut finally got good news on Dec. 19. Congress passed the Medicare, Medicaid and SCHIP Extension Act of 2007 earlier this week, replacing the scheduled 10.1 percent Medicare pay cut for 2008 with a 0.5 percent increase.

The catch: The law expires on June 30, so Medicare allowances for the remainder of 2008 are still up in the air.

Despite the congressional reprieve, however, you shouldn't take your attention off of the legislative wrangling that will be required to fix payments after June 30, says Jean Acevedo, LHRM, CPC, CHC, PCS, of Acevedo Consulting Inc. "They should be worried that come July 1, 2008, their reimbursement will drop to the 10.1 percent reduction," she says.

"We could be right back at square one this summer," agrees Cyndee Weston, executive director of the American Medical Billing Association in Sulphur, Okla.

Potential upside: "I-ve never seen Congress attempt just a six-month fix," Acevedo says. "Maybe the Senate is planning to tackle the core problem with the fee schedule between now and June. If so, that could actually be good news."

With the possibility of cuts still looming, your practice should develop an action plan to cope with the shortfalls you could see mid-year -- and beyond if Congress doesn't step in for 2009 as well.

Option 1: Consider not participating with Medicare, by either becoming a non-par provider or opting out of Medicare services all together and choosing to private contract with Medicare beneficiaries.

"The AMA recently cited a survey that found nearly 65 percent of its members would accept fewer new Medicare beneficiaries, and one-fourth of its members said they would stop seeing Medicare beneficiaries altogether," if the 10.1 percent cut goes though, Weston says.

Option 2: Make some cuts in your office to compensate for potentially lost revenue. Unfortunately, your practice may need to make up its losses in other areas. "Sixty-seven percent said they would defer the purchase of information technology," Weston adds.

Option 3: Find new ways to add revenue. Participating in programs like the Physician Quality Reporting Initiative (PQRI) can help you supplement your current reimbursements.

Bottom line: Rejoice in the six-month fix, but don't lose sight of the bigger picture. Start preparing now to collect less from Medicare in July, so you won't end up scrambling if a double-digit cut comes your way.