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6/24/10 2.2% Medicare Physician Fee Scheduler Update

The President Signs the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 --  2.2 Percent Medicare Physician Fee Schedule Update for June 1, 2010, Through November 30, 2010
On June 25, 2010, President Obama signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.”  This law establishes a 2.2 percent update to the Medicare Physician Fee Schedule (MPFS) payment rates retroactive from June 1 through November 30, 2010.  The Centers for Medicare & Medicaid Services (CMS) has directed Medicare claims administration contractors to discontinue processing claims at the negative update rates and to temporarily hold all claims for services rendered June 1, 2010, and later, until the new 2.2 percent update rates are tested and loaded into the Medicare contractors’ claims processing systems.  Effective testing of the new 2.2 percent update will ensure that claims are correctly paid at the new rates.  We expect to begin processing claims at the new rates no later than July 1, 2010.  Claims for services rendered prior to June 1, 2010, will continue to be processed and paid as usual.
Claims containing June 2010 dates of service which have been paid at the negative update rates will be reprocessed as soon as possible.  Under current law, Medicare payments to physicians and other providers paid under the MPFS are based upon the lesser of the submitted charge on the claim or the MPFS amount.  Claims containing June dates of service that were submitted with charges greater than or equal to the new 2.2 percent update rates will be automatically reprocessed.  Affected physicians/providers who submitted claims containing June dates of service with charges less than the 2.2 percent update amount will need to contact their local Medicare contractor to request an adjustment.  Submitted charges on claims cannot be altered without a request from the physician/provider.  Physicians/providers should not resubmit claims already submitted to their Medicare contractor.
1.         New fee schedules are not implemented over night. They have to be created, loaded, and tested not only with the Medicare Part B system but other systems in the mix such as, but not limited to, supplemental insurers.
            For this reason, note CMS is saying all your claims for dates of service 6/1/10 and after are being HELD for payment until fee schedule testing is complete. Claims processing will begin no later than 7/1/10.
            You need to plan for the worst case scenario that claims payment may not start until 7/1/10 in terms of your cash flow!
2.         It is vitally important to CHARGE your services at the VALUE of your service and NOT a payer allowable. The standard rule in insurance is to pay you the “lesser of your charge OR THE PAYER allowed amount.
            Under the law (also highlighted in red below), if your CHARGE for a claim for a Medicare service that has already been submitted with a date of service 6/1/10 and after is LESS THAN what the Medicare allowable will now be with the 2.2% increase, YOU will need to contact the Medicare contractor to get these claims reprocessed at the correct rates. These claims CANNOT be reprocessed automatically.

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