Part B Therapy Rate Reductions Return

With Congress on recess, the temporary extension of the Part B therapy rate cuts ended on March 31.  As of today, with Congress still on “holiday”, the Part B therapy rate cuts remain in effect.  Best knowledge has it that Congress is working on another temporary extension that would retro to April 1 and last through April 30.  When President Obama signed the Patient Protection and Affordable Care Act in March, the exception process to the Part B cap was extended through the end of 2010.

Medicare Part B therapy rates are directly tied to the physician fee schedule set for a 21% fee reduction in January.  Congress while muddling through health care reform, has passed a series of temporary patches to stave off the cut.  The belief is that a more permanent fix to the physician fee schedule issue is “in the works” however, the cost of such a fix is an issue.  The House passed a fix in late 2009 but the legislation died in the Senate.  The Senate has been less inclined to address a permanent fee schedule fix fearing the price-tag would produce additional political damages during a period of existing unrest regarding the health reform bill and the rising debt levels.  Additionally, and not without a tremendous amount of political foresight, the Democrats and the President left the fee schedule fix on the side-lines during health reform passage fearing that its sizeable price tag ($250 to $500 billion depending on the scope and permanency of the fix) would push the CBO score to the wrong side of neutral.  In summary, the physician fee schedule issue trumps the Part B therapy rate issue and thus, in typical Washington fashion, both hang in legislative limbo.

For now, CMS has indicated that it is willing hold claims pertaining to services under the fee schedule for ten days; from April 1 forward.  CMS believes that this temporary hold is better than adjudicating claims concurrent with the existing law (cut in effect) and then having to re-adjudicate another submission once Congress, upon their return on the 12th of April, passes another temporary extension.  Per CMS, this will not impact provider cash flow as clean claims (electronic) are not paid prior to fourteen days.  For any claims previously tied-up in limbo during the last period prior to the exception grant (signed by the President on March 2 as part of a “jobs’ bill) backdated to January 1 and ending March 31, CMS has instructed facilities to re-submit claims to the regional contractor adding the KX modifier.  In effect, the ” claims limbo” that occurred for the period between January 1 and March 31 should be cleaned-up by now for CMS and their regional contractors.  Facilities should be on top this and getting their claims properly modified, submitted and promptly paid.

Stay tuned for what happens after Congress returns on the 12th and what the lay of the land looks like post April 30th – the likely deadline for the next temporary extension.