Legislation Increases Medicare Physician Payment by 2.2 Percent Through Nov. 30, Replacing June 1 Cut

On June 25 President Obama signed legislation that provides a 2.2 percent Medicare physician payment increase for six months, from June 1 through Nov. 30, replacing the 21 percent payment cut that went into effect on June 1. The House of Representatives passed the legislation — H.R. 3962, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 — on June 24. The previous week the Senate had removed the physician payment update from broader legislation before passing the measure on June 18.

The Centers for Medicare and Medicaid Services had extended its hold on Medicare claims processing several times so Congress could consider legislation that would address the cut. The CMS had instructed its contractors on June 18 to begin processing claims with the 21 percent reduction. With the passage of the legislation on June 25, the CMS directed Medicare contractors to stop processing claims at the reduced rate and to temporarily hold claims for services rendered after June 1 until the new 2.2 percent update rates are operational in their processing systems, which the CMS expects to occur no later than July 1.

The new legislation does not address the sustainable growth rate formula, which is widely considered by physicians' groups to be at the root of the ongoing problems with Medicare physician payment. The SGR formula sets the expenditure target for physicians by linking it to the U.S. gross domestic product.

Read more on the Medicare physician payment cut and the SGR in Frontlines.