The U.S. Senate on February 26 failed to pass legislation to fix a 21% cut in Medicare payments set to go into effect on March 1. In response, the U.S. Centers for Medicare and Medicaid Services (CMS) are notifying contractors to hold Medicare claims for 10 days.
The 21% cut is mandated due to a flaw in the sustainable growth rate (SGR) formula used to calculate Medicare payments. The SGR cuts were initially slated to take effect January 1, but they were postponed through legislation signed in December by President Barack Obama.
The House of Representatives on February 25 passed legislation that included a postponement of the SGR rate cut, as well as other short-term fixes like an extension of unemployment benefits. But a similar bill in the Senate was unable to pass due to the threat of a filibuster from Sen. Jim Bunning (R-KY), who opposed the fact that its $10 billion cost was not being offset by cuts to other areas of the federal budget, according to an update from the American Psychiatric Association (APA) of Arlington, VA.
Senate majority leader Harry Reid (D-NV) is working with Bunning to find ways to resolve the senator's opposition. Because the Senate has adjourned for the weekend, the 21% cut will go into effect on Monday March 1, the APA said.
CMS has asked contractors to hold claims payable under the Medicare Physician Fee Schedule for the first 10 business days of March. The APA believes that the hold should minimally affect the cash flow of healthcare providers because under current law, "clean" electronic claims are not paid any sooner than 14 calendar days after the date of receipt (29 days for paper claims).
Related Reading
Senate works to extend SGR deadline, February 9, 2010
Medical imaging 2010: Is the sky falling? January 12, 2010
Obama signs SGR fix legislation, December 23, 2009
SNM supports SGR rate fix, December 23, 2009
House passes short-term fix to SGR cuts, December 17, 2009
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