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Life Health > Health Insurance > Medicare Planning

Budget Battle: Medicare Cuts Could Hit Jan. 18

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WASHINGTON (AP) —The 650,000 doctors who care for Medicare enrollees could face a 27.4% cut in reimbursement rates Jan. 18 if the House and the Senate fail to come to an agreement on H.R. 3630, the payroll tax cut continuation bill, officials said Tuesday.

One of the provisions in H.R. 3630 would waive a scheduled Medicare physician reimbursement rate cut.

The House included a 2-year reprieve in the original version of the bill that it passed. That was whittled down to 2 months in a compromise version of the bill that passed in the Senate last week. Senators set the extension at 2 months in an effort to give lawmakers to negotiate.

House Republicans have rejected the Senate approach, arguing that giving employers just 2 months of payroll tax system stability is impractical.

Congress first included the reimbursement rate cuts in a law enacted in the 1990s. It has been postponing the cuts ever since by passing a long series of temporary fix bills.

Medicare Deputy Administrator Jonathan Blum said in an interview that the scheduled Medicare reimbursement cut will go through unless Congress acts quickly, because the backlog from more than a couple of weeks of waiting for lawmakers could cause the program’s computers to crash.

Medicare sent an alert to doctors Monday telling them it will hold claims for the first 10 business days of 2012 unless Congress acts soon to waive the reimbursement cuts.

Medicare already has told the contractors handling its billing to start paying claims for 2012 at the lower rate Jan. 18, Blum said.

On Tuesday, Blum said holding claims any longer than 10 business days could cause problems for Medicare’s computers.

Last year, during a similar standoff that occurred during the summer, Medicare was able to hold claims for more than 20 days.

“We feel that (Medicare) came very close operationally to crashing our system back in 2010,” Blum said. “From a stewardship perspective, that is something we feel we can never repeat again.”

One factor that worries officials is that claims volume is expected to be high in the winter months.

Last year, after the previous standoff over cuts, Medicare heard from doctors who said they would rather get some cash flow while Medicare waits for Congress to act than no cash flow.

The American Medical Association, Chicago, said the annual struggle to pass a temporary fix is eroding the confidence of doctors and patients.
“Congress has again failed to fulfill its responsibilities,” said Dr. Peter Carmel, the group’s president. “It is shameful that patients and physicians are the collateral damage.”
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