The Impact of H.R. 2 on Your Practice & What You Need to Do

April 28, 2015

Since the Senate approved the H.R. 2 Medicare Access and CHIP Reauthorization Act of 2015 and averted a 21% pay cut, CMS announced an effort to minimize financial effects on providers: They would institute a 10-business day processing hold for all impacted claims with dates of service April 1, 2015, and later.

On April 15, 2015, CMS announced that these held claims would begin processing with the negative rate update on a first-in, first-out basis as of April 15. Meanwhile, they will continue to hold new claims as they are received.

The H.R. 2 Medicare Access and CHIP Reauthorization Act of 2015 eliminates the 21% pay cut for providers and permanently repeals the SGR formula, replacing it with a formula that will give half of one percent increases for the next five years, then move all physicians into the value-based payment program.

In addition, provisions that expired on April 1 allowing for exceptions to the therapy cap, add-on payments for ambulance services, payments for low-volume hospitals, and payments for Medicare-dependent hospitals have been extended. CMS is working to implement these provisions.

CMS also announced that while the Medicare Administrative Contractors (MACs) have been instructed to implement the new rates specified in the legislation, a small volume of claims will be processed at the 21% reduced rate. The MACs will automatically reprocess claims paid at the reduced rate with the new payment rate. They have advised that no action is necessary from providers who have already submitted claims for the impacted dates of service.

What does this mean to you short term?

  • There will be some chaos for Medicare payments until all updates have been loaded and implemented. Expect to see delays in payments and lower payments until the chaos has cleared.

What do you need to do?

  • You and your billing company need to be diligent – monitor the payments from Medicare and make sure they process correctly.
  • If they don’t process correctly, and are not reprocessed as promised, then follow-up with Medicare will be needed to make sure you are not leaving money on the table.

What does this mean to you long term?

  • Effectively this means physicians’ payments are moving away from fee-for-service towards a valued-based bundled payment. This is a really big change; it means being great at PQRS and being great at creating a margin per procedure.

Contact Vachette Pathology at 517-486-4262 to help you with your practice strategy.

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