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Medicare cuts hit doctors as Congress feuds

June 23, 2010

With the unthinkable happening, physician offices will begin receiving payments from Medicare that are 21.3-percent below what they’ve been getting so far this year. Doctors still expect Congress to reverse the payment cuts, but physicians and the Medicare program will have to reprocess claims, costing both extra money.

The cuts went into effect on Friday, the same day the U.S. Senate passed a bill that instead would give doctors a 2.2-percent hike in payments, at least through November.

But the U.S. House of Representatives has not passed the bill, and Speaker Nancy Pelosi (D-Calif.) is holding out for a broader bill that also would extend assistance programs for the unemployed, something the Senate bill does not include.

Pelosi said she saw “no reason” for the House to pass the Senate’s bill, according to CQ Today, a daily newsletter covering Congress.

Don Stumpp, president of Indiana Medical Group Management Association, said the cost to reprocess Medicare claims likely would offset all of the 2.2-percent increase in the bill. Reprocessing will also cost the Medicare program 30 cents per claim, according to an estimate by the Congressional Budget Office.

Congress has delayed the Medicare cuts several times this year. The cuts are prescribed by a formula adopted by Congress in 1997 called the "sustainable growth rate," or SGR.

“The continuous delays and fixes have been nuisances, but now that [the Medicare program] is actually processing reduced claims, Congress needs to realize they are affecting millions of people covered by Medicare, the Medicare Advantage plans and TriCare, the health care program for the military,” said Stumpp, who is also director of payer contracting at American Health Network physician practice in Indianapolis. “It is unbelievable that politics are now being played as the ‘Doc Fix’ is being held hostage for other legislation.”

Medicare, the taxpayer-funded insurance program for seniors, contributes the largest single chunk of revenue for most physician practices. The Medicare program's  administrators had been holding claims filed since June 1 in expectation that Congress would delay the schedule cut, building up a backlog of 50 million claims. On Friday, the Medicare agency said it would begin paying those claims at the new, reduced rate.

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