Potential Medicare Cuts: Is Your Practice Prepared?

Last week, the House passed H.R. 2, the “Medicare and CHIP Reauthorization Act” (MACRA), with overwhelming bipartisan support: 392-37.  Click here to view a section by section bill summary.

However, the Senate failed to vote on the bill before Congress adjourned for its two-week spring recess on March 27. This means that a 21% Medicare physician payment cut will technically take effect on April 1.  Medicare Physician Fee Schedule claims for services rendered on or before March 31, 2015, are unaffected by the payment cut and will be processed and paid under normal procedures and time frames.

Because Medicare is required by law to hold claims for two weeks prior to issuing payment, physicians would not actually experience any cuts before April 14 — the day after Congress returns. CMS will notify physicians on or before April 11 with more information about the status of Congressional action to avert the negative update and next steps.

Although Senate Majority Leader Mitch McConnell (R-KY) is confident that the Senate will "return to it very quickly when we get back,"  the Senate would have to pass the bill almost immediately to avoid physician pay cuts.

To prepare your practice for potential Medicare payment cuts, the American College of Physicians offers these suggestions:

  • Discuss with your financial and practice managers about how to cope with the potential of an approximate 21% cut in Medicare payments.

  • Consider a delay in collecting or billing the patient’s 20% co-insurance for services rendered from April 1 to 14 until after April 15 – either at their next visit or via mail. Under the provisions of current law regarding the SGR, the reduced rate will not only impact the payment amount to physicians, but will also decrease the co-insurance amount patients owe. Collecting the appropriate co-insurance amount could become complicated due to having to bill or reimburse patients for these additional or reduced amounts of coinsurance, especially when they are small.

  • Consider obtaining a line of credit to cover a temporary decrease in revenue.

  • Consider potential temporary changes in staffing or hours open in case of a long-term decrease in Medicare revenue until Congress can complete new legislation.

  • Consider delaying non-urgent, routine appointments of Medicare patients until the issue is resolved.

In the meantime, CSMS urges physicians to contact the Senate and tell them to #FixMedicareNow.