Written by Brooke Haycraft, CEMC, CFPC, CPC-H, CPC
The 2014 Medicare Physician Fee Schedule expired on March 31st, 2015. The new Medicare rates are scheduled for implementation on Wednesday, April 1st, 2015 and propose a 21% cut in reimbursement to physicians.
The Medicare Sustainable Growth Rate (SGR) was implemented in 1997 and was intended as a mechanism for the Centers for Medicare and Medicaid Services (CMS) to reduce Medicare spending. Currently, the government creates an annual budget to reimburse physicians for their services based upon the SGR. Unfortunately, the budgeted amount has not been enough to cover healthcare costs in years past and Congress has continually authorized small payment increases to avoid shortfalls. If authorization of payment increase is not approved this year, then all of the past SGR reductions will be implemented on the new 2015 fee schedule. The past SGR reductions will roughly equal a 21% payment reimbursement cut to healthcare providers on the new fee schedule imposed on April 1, 2015.
The Medicare SGR is due to be replaced by a Merit-Based Incentive Payment System (MIPS), a system that rewards providers based on quality of care and cost effectiveness rather than the current, ‘fee-for-service’ model. On Thursday, March 26, the U.S. House of Representatives voted to repeal the SGR model and implement MIPS and the bill was sent to the Senate for further review.
Unfortunately, the Senate adjourned for its spring recess before acting on this bill to repeal the SGR model and will not reconvene until Monday, April 13, 2015, giving the Senate just two days to reach a decision on the bill. If the Senate votes promptly upon return from recess and adopts the House bill, then the 21% reimbursement cut will be avoided.
CMS reminds providers that, “under current law, electronic claims are not paid earlier than 14 calendar days (29 days for paper claims) after the date of receipt.” CMS is using the Senate delay to hold incoming claims for a small time period to allow the issue of the 21% payment reduction to be addressed by the Senate. CMS also notes that claims for services furnished on or before March 31, 2015 will not be subject to a 21% payment cut and will be processed and paid under normal time frames.