Practice Management Alert

10-month delay will only push payment formula problems to 2013.

If your practice has been on pins and needles waiting to see if you would face Medicare cuts scheduled to start earlier this month, you can breathe easier but only for a few months. At the end of the year, the whole wait-and-worry process begins again.

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Congress reached an agreement that brings both good news and bad news. The good news is that under the Congressional agreement, you won't have to deal with a massive conversion factor cut that would have slashed the Medicare conversion factor from the current $34.0376 to just $24.6712, which was due to take effect on March 1.

The agreement freezes Medicare payment rates at the current amount through Dec. 31, 2012. The deal was announced on Feb. 15, and the House and Senate voted to pass the bill on Feb. 17. Then, on Feb. 29, President Barack Obama signed the Middle Class Tax Relief and Job Creation Act of 2012, the bill that included the provision to prevent the 27.4 percent cut.

Experts Lament Repeated Delays Rather Than Permanent Fix

The bad news is that although medical societies were abuzz with speculation that legislators were working to overhaul the Medicare payment formula system to avoid future reimbursement issues, that has not materialized. Instead, under the agreement, physicians will benefit from a pay freeze through the end of 2012, with hopes that Congress will find a way to repair the Medicare payment system before additional cuts kick in on Jan. 1, 2013.

"Congress had an opportunity to permanently end this problem, which is the sound, fiscally prudent policy choice," said Peter W. Carmel, MD, president of the American Medical Association in a February statement. "We appreciate efforts by members of Congress on both sides of the aisle who publicly supported a framework for a permanent end to this perennial problem. We are deeply disappointed that Congress chose to just do another patch -- kicking the can, growing the problem, and missing a clear opportunity to protect access to care for patients."

Practices agree: "I think that this was premeditated by Medicare," says Charlene Endre-Burgett, MS, CMA (AAMA), CPM-MCS, CPC, CMSCS, administrator with North Scottsdale Family Medicine in Ariz.  "They knew physicians would not accept a small increase of 0.5 percent or 1 percent, so how do you get the health care industry to accept it? Threaten a huge decrease in reimbursement and then come back at the 11th hour with the intended puny increase and act like you are doing physicians a favor. Medicare is a 'hero!' It's crazy, but it has worked for years now."