As this issue of AAOS Now went to press, the President had just signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (HR 3962).

The legislation provides for a 2.2 percent update to the Medicare Physician Fee Schedule payment rates for services provided on or after June 1, 2010, through Nov. 30, 2010. The Centers for Medicare & Medicaid Services (CMS) has placed a hold on claims payments until the new rates are tested and loaded into Medicare contractors’ claims processing system. CMS expects to begin processing claims at the new rates no later than July 1, 2010.

The Sustainable Growth Rate (SGR) formula had called for a 21.2 percent cut in payment rates. Congress had initially delayed implementation twice; CMS, however, was compelled to begin paying claims at the lower reimbursement on June 18, when Congress still had not reached agreement on yet another “fix.”

CMS notes that claims paid at the negative update rates will be reprocessed. 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. Physicians/providers should not resubmit claims already submitted to their Medicare contractor but will have to request an adjustment for claims submitted with charges less than the update amount.

Reprocessing claims increases costs on both sides of the healthcare program. CMS has estimated that reprocessing will cost the agency 30 cents per claim, or about $15 million for the 50 million claims it held in June.

“The American Association of Orthopaedic Surgeons (AAOS) is working with the Surgical Coalition to develop an alternative payment system,” said AAOS President John J. Callaghan, MD, in a message to members, “a solution that permanently replaces the SGR.”

Watch AAOS Headline News Now and AAOS Advocacy Now for continuing updates on the situation.