Medicare To Hold Claims After January 1, 2012

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The 2012 Medicare Physician Fee Schedule is set to take effect on January 1, 2012. As things sit at press time, this will be a “negative update”, meaning the Sustainable Growth Rate (SGR) formula used to calculate the value for services produces a cut in fees of over 25%. Consequently, as on numerous occasions in the past, the Centers for Medicare & Medicaid Services (CMS) will instruct its Medicare claims administration contractors to hold claims containing 2012 services paid under the Medicare Physician Fee Schedule for the first 10 business days of January (i.e., January 1, 2012, through January 17, 2012).

The hold should have minimal impact on provider cash flow because, under current law, clean electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt. However, Congressional action will be needed to avert the negative update. If Congress fails to take action in time, claims will be paid at the mandated lower rate, after the hold is over. If the rate is subsequently adjusted, reimbursements to Participating providers (PAR) will automatically be adjusted to the new rate, retroactively. NON-PAR providers will not have their reimbursements adjusted.

Medicare Physician Fee Schedule claims for services rendered on or before December 31, 2011, are unaffected by the 2012 claims hold and will be processed and paid under normal procedures and time frames.

Click here to read a further analysis by Dr. Ron Short

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