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April 17, 2015 - SGR Update

As previously reported, on April 1, 2015, the Medicare Physician Fee Schedule (“MPFS”) was updated using the Sustainable Growth Rate (“SGR”) methodology as required by current law. The SGR methodology required a 21% decrease in all MPFS payments beginning April 1, 2015. Pending possible intervention by Congress, The Centers for Medicare & Medicaid Services (“CMS”) took steps to limit the impact on Medicare providers and beneficiaries by holding claims paid under the MPFS with dates of service on and after April 1, 2015. In the absence of intervening legislation averting the negative reimbursement rate change, CMS must update payment systems to comply with the law, and implement the rate cut.

Beginning tomorrow, April 15, 2015, CMS will release held MPFS claims, paying providers at the reduced rate, based on the lower rate schedule, on a first-in, first-out basis, while continuing to hold new claims as they are received. CMS will release one day’s worth of held claims, processing and paying at the rate that reflects the negative rate update. At the same time, CMS will hold the receipts for that day, thus continuing to hold 10 days’ worth of claims at any given time. This will provide continuing cash flow to providers, albeit at the rate that reflects the negative update. This “rolling hold” will help minimize the number of claims requiring reprocessing should Congress pass legislation reversing the reimbursement rate cut. Precision remains confident Congress will pass such legislation.

Please note that claims for services furnished on or before March 31, 2015 are not affected by the payment cut and will be processed and paid under normal timeframes and reimbursement rates.
We understand that the MACs will automatically reprocess claims paid at the reduced rate if Congressional action is taken to avert the negative rate update. Precision is therefore releasing claims for all providers unless otherwise instructed to hold those claims.

Please don’t hesitate to contact Precision if you would like to discuss this most recent SGR update.