CMS delays Medicare payments due to SGR impasse

With Congress unable to pass legislation to change the sustainable growth rate (SGR) formula to avert a July 1 physician pay cut, the Centers for Medicare and Medicaid Services will delay processing claims until July 15 at the earliest, according to the American College of Radiology.

Good news or bad? Mostly good, according to ACR spokesperson Shawn Farley.

"This delay is to let Congress work out some compromise," Farley said. "If the legislation had passed and been put into effect today, claims processed would reflect that cut. So in fact, this is CMS throwing doctors a bone while Congress works this out."

CMS spokesperson Jeff Nelligan said that the delay in processing claims means that claims that would have been paid in mid-July will be late by up to a week. According to the Associated Press, lawmakers in both parties are rushing to reassure doctors that if the standoff continues, they'll be repaid retroactively.

For the past month, Congress has been tussling over the legislation. On June 26, nine Senate Republicans voted with Democrats in favor of the bill for a count of 58 to 40, just short of the 60 needed to move toward congressional passage of the measure. Two days earlier, the U.S. House of Representatives had passed its version, called the Medicare Improvements for Patients and Providers Act of 2008, with a veto-proof majority of 355 to 59. The bill replaced the 10.6% cut, as well as a 5% cut set for January 1, 2009, with a 0.5% positive update for the rest of the year and a 1.1% update through 2009.

When the House passed its version of the bill, President Bush threatened to veto; that threat remains, although Senate Democrats are hopeful, according to Orrin Marcella, ACR's director of congressional affairs.

"The Democrats believe that if they can pass this procedural hurdle, then enough Republicans will vote for the bill to override a veto," Marcella said. "The Republicans believe they can force the Democrats to concede to modified legislation. Anything can happen. This is our turn in the political spin cycle."

In a statement, U.S. Department of Health and Human Services Secretary Mike Leavitt urged Congress to move quickly to pass a bipartisan bill the president can sign that's similar to the most recent draft of the legislation.

"Once [legislation is] enacted, we will move promptly to reprocess claims and take other steps necessary to ensure that providers and beneficiaries are not negatively affected," he said.

Both the Senate and the House versions of the bill included roughly $12.5 billion in cuts from the Medicare Advantage program, which allows elderly and disabled people to get health benefits through private insurers rather than through Medicare, according to Farley.

"If Congress doesn't work something out and they let the cuts go through, CMS will reimburse claims filed between now and July 15 retroactively, with the cuts in place," Farley said. "But that's not expected at this point. No one -- Republican, Democrat, or even the president -- wants those cuts to go through as planned."

By Kate Madden Yee staff writer
July 1, 2008

Related Reading

U.S. Senate blocks Medicare bill with HMO cuts, June 27, 2008

U.S. House moves to head off SGR cuts, June 25, 2008

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