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Urgent action needed: 26.5% Medicare payment cut looms, contact your lawmakers now

Release Date: December 21, 2012
Contact: Lisa Hildebrand - 608.442.3765 lisa.hildebrand@wismed.org

Congress recessed for the Christmas holiday last evening without addressing either the fiscal cliff or acting to avert a 26.5 percent reduction in Medicare payments to physicians scheduled to take effect in just 11 days – on January 1. While the U.S. Senate technically is still in session, without agreement between both houses of Congress and President Obama on how to avert the fiscal cliff or the 26.5 percent reduction in Medicare physician payments, no votes will be taken until after Christmas at the earliest.

What does this mean for physicians who participate in the Medicare program and care for Medicare beneficiaries?

Without Congressional action before January 1 to stop the 26.5 percent reduction in Medicare payments, the cut will take effect and will be applied to all Medicare Part B physician services until there is Congressional action.

The American Medical Association (AMA) has reached out to the Centers for Medicare & Medicaid Services (CMS) for guidance in the absence of Congressional action. CMS advised the AMA that it will follow normal claims processing procedures. This means that claims will not be held and that Medicare carriers will process payments for physician services provided after December 31, 2012, under the normal 14-day cycle required by law. Payment for these claims will be based on the lower fee schedule conversion factor of $25.0008, as opposed to the current rate of $34.0376 resulting in a payment cut of 26.5 percent.

Additionally, because there is no action to avert the fiscal cliff, sequestration will take effect which means that all payments to physicians and other health care professionals who participate in the Medicare program will be cut an additional 2 percent.

The Wisconsin Medical Society and the AMA will continue to closely monitor Congressional negotiations. The Society’s Government Relations staff will provide updated information as it becomes available.

Please contact your federal representatives to advise them of the devastating impact that an immediate 26.5 percent reduction in Medicare payments means to your patients, your practice and your health system or clinic. You may contact your lawmakers through the AMA’s Legislative Action Center or via the AMA’s grassroots hotline at 800.833.6354.