When the U. S. Senate adjourned last night at 8:38 PM EDT, it did so without passing emergency legislation to delay a 21.3% cut in the Medicare physician fee schedule.

The bill under consideration last evening, which also included an extension of long-term unemployment benefits, was defeated on primarily on a straight party line vote. Following the vote, Senate Majority Leader Harry Reid (D-NV) attempted to bring a bill to the floor for a vote that addressed only the physician pay cut. This bill would delay the pay cut until the end of 2010. Minority leader Mitch McConnell (R-KY) raised an immediate objection to the bill being brought up for debate, and the Senate adjourned until this morning.

A look at the executive schedule of business for the Senate today shows that no legislation is scheduled to be brought up for debate.

Fi-Med will be following this story as it develops throughout the day. This post will be updated immediately upon release of new information regarding a possible fix to this situation.

UPDATE: [2:18 PM EDT, 6/18/2010]: The Senate has passed legislation that delays the 21.3% pay cut for a six-month period. Because this bill is now a new piece of legislation, it must be returned to the House of Representatives for approval. Apparently, the House is unable to take up the legislation until next week. Moments after the bill passed the Senate, CMS issued a statement saying that claims processing will begin today at the lower pay rate. By law, CMS has run out of options with regard to delaying claims processing any further.

One good piece of news comes out of this. When the bill is passed by the House, all claims with dates of service between June1st and November 30th, 2010 will be subject to a 2.2% increase in the fee schedule that has been followed in the first 5 months of this year.

So to recap, this is a 21.3% cut, followed by reprocessing that repays the cut, plus 2.2%.

A curiosity in all of this is that the AMA is stating that after the cut is eliminated, CMS will only automatically reprocess claims when the submitted charges are higher than the reinstated allowed amount. Those claims with charge amounts that are lower than the new rate will require contact with the contractor.  When the cut is reversed, this needs to be watched carefully.

The office of U. S. Senate Majority Leader Harry Reid (D-NV) has been quoted by an industry source as saying that legislation currently in the Senate that would further delay the 21.3 % Medicare physician fee schedule cut will not be considered prior to the next dealine for the cut to take effect.

The pay reduction was originally scheduled to be implemented on June 1st. CMS is currently holding claims for the first 10 working days of June, which is delaying the cut until this coming Monday, June 14th. Senator Reid’s office has stated that no votes are scheduled on the pending legislation either tomorrow or Monday, as senators will be visiting their home states during this time.

The earliest a vote could be cast on the legislation would be Tuesday, June 15th. In the recent past, when faced with a similar deadline, Congress requested that CMS not release claims for payment until the legislation could be considered and sent to the president for his signature. Given this history, I am of the opinion that this legislation will be reviewed and passed upon the Senate reconvening on Tuesday the 15th. The only way to be certain of this outcome is to stay tuned.

The legislation currently on the table provides for a 2.2% payment increase for the remainder of 2010, followed by a 1% increase in 2011. The current oft-delayed pay cut would be restored in 2012, more than likely at a deeper percentage rate, unless a permanent fix to the Sustainable Growth Rate is implemented prior to 2012.

As we return from the Memorial Day recess, we are greeted by news on two fronts that was released late on Friday, May 28th:

Physician Pay Fix - To no one’s surprise, Congress was unable to pass a payment fix to the projected 21.3% pay cut that is due to take effect today. As a result, CMS has once again stated that claims with dates of service of June 1st and after are now subject to a hold in processing for ten business days to avoid applying the cut to claims. This will last on the calendar until June 14th. Congress is in recess for the remainder of this week as part of their “Memorial Day Recess” (funny how we get one day and they get five), meaning that almost half of CMS’ hold period will be spent waiting for Congress to come back to work and pass yet another temporary pay fix.

Red Flags Rules - The Red Flags Rules, of which the delays in enforcement  I have now officially lost count, have once again been delayed, this time until December 31st, 2010. Congress requested this particular delay in the rule because it is currently working on legislation that would either exempt certain businesses automatically from the rules or would allow businesses to request an exemption. At the same time as this legislation is being crafted, the AMA, the American Osteopathic Association and the Medical Society of the District of Columbia filed suit against the FTC on May 21, 2010 requesting that the FTC be barred from enforcing the rules against physicians. The suit argues that the FTC is exceeding its statutory authority by defining physicians as “creditors”.

As you can see, this is your typical federal government Friday news dump. Be certain to keep an eye on this space for further updates as they occur.

A few tidbits of information were released over the past week that affect providers. Below is a summary of these important updates:

PECOS – Originally, the deadline for performing and ordering physicians to have their provider enrollment information updated in the PECOS system was January 3rd, 2011. This past Wednesday, CMS released an interim final rule that moves this date up to July 6, 2010. From the date of this writing, this now gives providers 60 days to complete re-validation in the PECOS system.

One thing to keep in mind is that this affects all providers. If a physician performs services or furnishes items that were either ordered or referred by a provider who is not updated in the PECOS system, the performing physician possibly faces claims denials for services rendered.

UHC Class Action Lawsuit – If you are a provider who has billed a United Healthcare insurance product in the past 8 years, chances are you or your billing entity received a mailing in the past ten days informing you of an impending settlement of a class action lawsuit brought against UHC.

The suit was originally filed by the American Medical Association and was in relation to UHC’s and their subsidiaries’ method of paying benefits for out-of-network claims from a period beginning on January 1, 2002 and ending on May 18, 2010. If you as a provider furnished out-of-network services for a UHC or allied insurance after this date, you may qualify for a portion of the negotiated settlement amount, currently listed as $350 million.

If you fall into the above category, you now have until October 5, 2010 to file a claim for payment from the settlement fund. If you yourself have not received a mailing from UHC, the AMA has set up a resource link on their website.

Pay Fix Update – And what would a weekly industry roundup be without yet another update in the continuing soap opera that is the delayed fix to the physician fee schedule?

The latest deadline for the implementation of the 21.3% cut to physician fees is now May 31st, but given the painful lessons we have learned about the American legislative process throughout the Winter and early Spring, the actual deadline date to look at is June 14, 2010. CMS has shown their willingness to delay claims processing for the full limit allowed by law of ten working days after any deadline in order to give Congress more time to work on the problem. So far, the Congressional solutions brought forward have been akin to fixing a traumatic amputation with packed mud and a loosely fastened oily rag. I can only imagine which suddenly cost-conscious senator will get on his or her soapbox this time out and complain about costs. 

Adding to the debate on a permanent pay fix was a Congressional Budget Office report of costs associated with the fee schedule being kept in its current form through 2020. CBO estimates a cost of $275 billion for that time period if no adjustments are made to the fee schedule. It remains to be seen how this report will be spun by both sides in the upcoming debate.

National media interest in a permanent pay fix was beginning to increase before the cataclysmic events in the Gulf of Mexico changed the Beltway focus from health care policy to energy policy. With the impending Memorial Day holiday, I fully expect this topic to be handled in the needlessly sloppy and emergent way that it has been addressed in the recent past.

Late last night, Congress passed the latest delay in the implementation of the 21.3% pay cut to the Medicare physician fee schedule. Unfortunately, the legislation was only acted upon urgently when CMS stated that by law they had no other option but to begin to process Part B claims for dates of service of April 1st and after with the pay cut beginning yesterday.

CMS will now instruct the contractors to reprocess all claims for services rendered after April 1st  that were processed on April 15th. This basically means that if you receive a Medicare explanation of benefits (EOMB) that is dated 4/15/2010, and the payments on charges reflect the cut, you should receive an EOMB from a subsequent date with the additional payment for these same charges.

This latest fix will be in effect until May 31st, 2010.  

We are now 3 1/2 months through the year, and a permanent fix to the Sustainable Growth Rate (SGR) formula has yet to be acted upon. There are only two visions of Congress running through my head when I think about this topic. The first has to do with the yellow-fingered denizens of a heroin shooting gallery craving their next balloon, and the second is that episode of the Three Stooges where they attempt to fix someone’s plumbing. Either one on its own is either horrifying or funny, but when blended together quickly becomes the nightmare scenario in which we now exist on a month-to-month basis.

I can clearly and unabashedly state that based on how American tax dollars were spent from 2001 through 2009, clearly legislative and budgetary ignorance are not particularly virtues of any one political party. Yet as the SGR rock is continually booted down an ever-darkening path as the sun sets on common sense, doctors and an ever-expanding Medicare population now walk a knife-edge, with physicians crunching future numbers wondering how to stay in the business of health care and elderly and infirmed patients wondering if they’ll be able to see a doctor at all.

In the last ten years, through either epic overreaching or near-criminal inaction, our government has either directly or indirectly broken budget surpluses, civil liberties, our court system, the ease of air travel, banking, housing, manufacturing, civil discourse, a bridge in Minneapolis, two buildings in New York City, Iraq, Afghanistan and the city of New Orleans.  Is it too much to ask that just one thing that directly affects the general welfare of a significant portion of our population gets fixed?

Last night, my family and I became the proud owners of a shelter cat. He’s a (roughly) 8-year-old tabby named Mike. In the 12+ hours we’ve owned him, my first instinct is to change his name to Elmer, as this cat is glued to any human that enters the room. He has already gotten very comfortable with head-butting my arm as I try to operate a mouse on my home office desk. I also learned very quickly this morning that eating and checking e-mail to start my day may require three arms from this day forward.

There is one very clear ill effect thus far to this sudden change in my home population, and that would be the effect Mike is having on Rocky, the family dog. Rocky is very much my wife’s protector, and visual contact with her must be maintained at all times. When this isn’t maintained, Rocky begins to shake, whine and pace back and forth. To introduce Mike to the home, we’re starting him out in one room of the house. When my wife disappears into that room, closing the door behind her, Rocky takes this behavior to a new and as-yet undiscovered height. It was hard for me to believe this morning that this squealing and cowering nervous wreck is the same dog who boldly and aggressively barks at the mailman every day.

For both human and canine, sudden and abrupt change can be a time of upset and discomfort. In the health care arena, as the dust settles in the days and weeks after the passage of the Patient Protection and Affordable Health Care Act, we have all been internalizing information contained in the law and how it affects every facet of the health care delivery system. Knowing this, it’s important to know what the heavy hitters in the industry (namely insurance companies and doctors) have begun to  put in place to prepare for the bulk of the changes that will hit in 4 years.

In looking at the insurance industry, it is important to remember that every one of them has a team of lawyers that are more than happy to dissect any law to see how the words on the printed page can be manipulated in favor of the company and its stockholders.

The industry already gave itself a gift with the portion of the law which mandates coverage for all who can afford it. After Medicare Part D was passed in 2003, the insurance industry used Medicare drug coverage as a golden opportunity to expand its reach into the federal health insurance plan by using their drug plans as a selling point for Medicare Advantage plans. In many cases, industry practice was comparable to the long-distance telephone slamming that went on in the 1990’s, with people not realizing what product they had until the first bill came in the mail.

The new law mandates that insurance companies who offer Medicare Advantage plans must put in place provider networks for the plans by 2011. Some of the bigger insurance companies with Medicare Advantage plans have begun to answer this mandate by pulling out of the Medicare Private Fee For Service market altogether rather than going through the expense of building a provider network. It’s a calculation that ceasing coverage for a portion of the older population which tends to use medical resources more often will lead to a healthier bottom line when compared to the cost of building a provider network. With the post-World War II baby boomers beginning  to turn 65, and with average life expectancy in the mid to late seventies depending on gender, saying goodbye to such a large portion of the market would appear to be a long-term financial gamble akin to what banks did prior to the mortgage bubble bursting. In the short term, the discomfort of change will be placed upon those currently covered under a Medicare PFFS plan that terminates at the end of the year. All this time, I thought the Scorched Earth Policy officially ended with Napolean’s ill-conceived invasion of Russia. It looks like I got that one wrong.

The AMA issued a press release shortly after the passage of the law attempting to draw attention to the financial benefits to physicians. While it’s good to maintain a positive attitude in times of change, it is a good time to note that 5 days from now, without a legislative fix, Medicare payment rates will fall 21.3% for all services after April 1st. As in the past, a temporary fix is expected, yet an opinion is beginning to develop in the physician community that without a permanent fix to the Sustainable Growth Rate (SGR) formula for calculating physician payments, the world of health care delivery for the elderly American will suddenly be a narrow and unfriendly place.

Change brings anxiety. From a multi-billion insurance company to the family dog, long-held routines bring comfort and a sense of security. Due to the new reform law, the business of health care finds itself on the precipice of a pit obscured by clouds. Whether the distance below these clouds is 5 feet or 5,000, it is in the preparation for either eventuality of the leap that determines the jumper’s fate.