CMS Acts To Address 4.4% Medicare Provider Payment Cut

CMS last week announced plans to reprocess Medicare claims later this year to erase a 4.4% reduction in payments to providers that took effect Jan. 1 if Congress approves a freeze instead of a cut in rates, CQ HealthBeat reports (Reichard, CQ HealthBeat, 1/9).

Congress late last month approved the fiscal year 2006 spending cut package (S 1932), which contains a provision to freeze provider payments at current rates instead of cutting them by 4.4%. However, in approving the bill, the Senate also made several changes to provisions, forcing the legislation back to the House for approval before it can be signed by President Bush (California Healthline, 12/22/05).

House members are expected to vote on the measure after they return from the winter break, but CMS was required to go forward with the payment cut as scheduled.

In a Jan. 6 letter to House Ways and Means Committee Chair Bill Thomas (R-Calif.) Herb Kuhn, director of the CMS Center for Medicare Management, said CMS will automatically reprocess all provider claims paid at the lower rate once the budget measure is approved. He added, "Physicians and other providers will not need to resubmit their claims."

CMS will combine claims so that each provider receives a single payment to offset the cut.

Kuhn noted that reprocessing could take until July 1 because of the expected volume of claims before the budget bill is signed. He said doctors who chose to stop accepting Medicare beneficiaries because of the payment cut will be given a 45-day re-enrollment period in which they can rejoin the program.

The American Medical Association praised CMS' decision but urged Congress to "finish the work it began and stop the cuts immediately upon return to Washington."

A lobbyist for AARP expressed concern that Medicare beneficiaries could be asked to pay retroactive copayments to doctors based on the higher payment amount. "It appears from the letter that doctors could waive the additional amount, but it's not clear how many will do that," the lobbyist said (CQ HealthBeat, 1/9).