On June 25, President Obama signed into law a 2.2% increase in the Medicare fee schedule (MPFS) retroactive from June 1 to Nov 30.
The political wrangling over this update has resulted in substantial delay in payments from Medicare providers, as claims submitted after June 1 were held pending the expected update. It is expected that claims will be processed after July 1, and will be processed normally after that time.
The politics of this issue are longstanding and complex. In order to justify blatantly optimistic budget assumptions, Congress put a yearly automatic decrease in Medicare reimbursement into the law. As the law is written, the decrease in Medicare reimbursement rates would be cumulative, totaling almost 21%. This decrease has been routinely overturned by each congress at the urging of physicians and senior groups. However, this year, because of partisan wrangling over the budget and linkage of the bill to unemployment insurance, the routine revision was not passed before the June 1 deadline.
The immediate result was a substantial drop in payments to all providers, as most claims were held pending the change. It is expected these claims will be paid relatively quickly now that the law has been signed.
The long term implications are far more daunting. The underlying issues of underfunding of Medicare, unprecedented federal deficits, and runaway medical costs are not being addressed or resolved.
Congress is hard pressed to solve this issue, and there will be substantial incentive to cut provider reimbursement as one method to address these funding problems.
Strong forces are lining up on both sides of the issue, with insurance companies, unions, and deficit hawks on one side clamoring for lower costs, with doctors, senior groups, and some care advocates claiming dire consequences if draconian cuts are instituted. It is our opinion that such cuts will greatly reduce the ability of physicians to provide quality care and result in multiple unintended consequences such as decreased access to specialists and massive increases in emergency care.
Needless to say, medical providers have much at stake in this battle. We will keep you apprised as to the progress of the issue. We strongly recommend you write your congressman, as well as get involved in your local medical organizations.
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