House passes 19-month SGR relief

The House passed an amended version of the “American Jobs and Closing Tax Loopholes Act of 2010,” which includes a provision to suspend Medicare physician payment cuts produced by the SGR formula for 19 months. The Act will prevent the 21% cut originally scheduled for 2010, with the House proposing a 2.2% payment update for the remainder of this year, and a 1% update for 2011. Under the House’s proposal the SGR challenges will resume in 2012, with an estimated 33% payment cut for that year. The Senate will not resume until June 7 to consider the legislation.

Congress needs to hear from you! Contact your representative and senators today using the AMA’s toll-free grassroots hotline at (800) 833-6354 or send them an email. A long-term solution to the SGR is needed today!

The Centers for Medicare and Medicaid Services (CMS) has notified physicians it will delay processing claims for two weeks. CMS told its contractors to hold claims for Medicare reimbursement for 10 business days “to avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians.”

Your voice needed in SGR survey

Please take a short survey designed by the AMA to determine how threatened cuts to Medicare physician payments and instability in the Medicare program are affecting physician practices. The survey will be open through close of business May 21, and results will be used in advocacy efforts to reform Medicare's current physician payment formula.

Medicare Cuts Delayed Until June 1

Last night, the President signed H.R. 4851, the Continuing Extension Act of 2010, into law, reinstating Medicare physician payments to where they were on March 31 and again postponing the 21.3 percent cut that was supposed to take effect in 2010. This most recent extension of 2009 payment rates will continue through the end of May, and will be applied retroactively to all physician services provided to Medicare patients in April.

Yesterday, the hold on processing April claims that the CMS had placed to avoid implementing the payment cut technically expired. However, with Congressional action so imminent, do not believe many claims were actually processed at the lower payment rates. However, CMS indicated that any claims paid that reflected the 21.3 percent cut will be reprocessed automatically without any action required from physicians.

Senate Advances Delay of Medicare Cuts

Yesterday the Senate voted 60-34 to limit debate on a bill that extends a number of expiring programs, including a dealy of the 21% Medicare physician payment cut. No deal has been struck to expedite passage of the bill. Without such an agreement, Senate procedures do not allow for a final vote until later in the week.

CMS instructed its carriers to refrain from processing any claims for services provided on or after April 1 for 10 working days, to minimize administrative complications and other disruptions that would result from calculating payments that reflect a rate reduction that Congress is expected to overturn. That 10 day grace period expires on Wednesday, April 14. If Congress fails to pass legislation by close of business on Wednesday, Medicare law will require carriers to begin processing claims for services provided in April with the 21 percent cut. However, it is expected Congress will to pass legislation that retroactively restores payments to levels in place prior to April 1.

CMS to Hold April Claims for 10 Business Days

CMS is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of services and payment of claims paid under the Medicare Physician Fee Schedule (MPFS). The Temporary Extension Act of 2010, enacted on March 2, 2010, extended the 0% update to the 2010 MPFS through March 31, 2010.

CMS believes Congress will take measures to avert the negative update slated to take effect April 1. Consequently, CMS has instructed its contractors to hold claims containing services paid under the MPFS for the first 10 business days of April. This hold will only affect claims with dates of service starting on April 1, 2010, and forward. In addition, The hold should have minimal impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt.

AANEM will continue to update its members on new information related to the 2010 MPFS extension.

Senate votes to again delay Medicare cut

The U.S. Senate voted yesterday to delay this year's 21 percent cut in Medicare physician payments until Oct. 1. The AMA continues to call for permanent reform of Medicare's sustainable growth rate formula. "If the House adopts this Senate bill, America's seniors and their physicians will be left in limbo, and access to health care for Medicare patients will continue to be in grave danger," AMA President J. James Rohack, MD, said in a statement.

SGR Cut Averted for 1 Month

Last night the Senate voted 78-19 to pass H.R. 4691, the "Temporary Extension Act of 2010," which included provisions to extend 2009 Medicare physician payment rates through the end of the month. As a result, the 21% payment cut that took effect on March 1 has been postponed until April 1.

The bill passed the House on February 25, only to encounter opposition on the Senate floor by Senator Jim Bunning (R-KY), who objected to the legislation being considered as an emergency measure that would not require budgetary offsets. In addition to postponing Medicare physician payment cuts, the bill extended a variety of other expiring programs including unemployment insurance and premium subsidies for COBRA continuation coverage for those whose employment was involuntarily terminated.

Discussions are still underway in the House and Senate on the next steps that will be taken to address the Medicare payment crisis. Proposals are being circulated that would implement still another short-term patch to the sustainable growth rate (SGR) formula, including proposals that would postpone cuts for 90 days, 7 months, or through the end of 2010. The AMA and those currently attending its 2010 National Advocacy Conference in Washington, DC, continue to press for permanent repeal of the SGR, rather than repeating the pattern of short-term remedies that serve to make future payment cuts more severe and increase the cost of permanent Medicare payment reform.

Members are urged to keep up the pressure, especially in the Senate, for enacting legislation to permanently resolve the Medicare physician payment crisis. Use the AMA’s Grassroots Hotline at 800-833-6354 or write an email.

Senate Fails to Prevent SGR Cuts

Yesterday, the House passed HR 4691, legislation that extends a number of expiring programs for 30 days, including current Medicare physician payment rates, which would once again postpone the 21% cut that was scheduled to take effect this year. The Senate attempted unsuccessfully on several occasions last night and this morning to pass the same bill by unanimous consent, but objections were raised by Senator Jim Bunning (R-KY), on the basis that $10 billion cost of the program extensions was not offset. The Senate has now adjourned for the weekend, so the 21% Medicare physician payment cut will be effective on Monday, March 1.


The Centers for Medicare and Medicaid Services (CMS) informed the AMA that they are notifying their contractors to hold Medicare physician claims for 10 business days, effective Monday. The agency will also be sending out a similar message on its various list serves this afternoon to physicians, and contractors will be instructed to disseminate this information as well.

Express your outrage to Congress about its terrible mismanagement of the Medicare and TRICARE programs, which are so important to the health and well-being of Americans who have served our nation so long and so well. Tell them:

• Congress had more than a year to repeal the Medicare payment formula and ensure the security and stability of the program. Instead, it has abandoned patients who rely on Medicare and TRICARE for their health care.
• Parliamentary procedures offer no excuse for the harm they are causing these programs.
• Stop playing games with patients and the physicians; repeal the sustainable growth rate (SGR) formula once and for all.

Use the AMA's toll-free grassroots hotline at (800) 833-6354 or write them an e-mail.

SGR Delay Expires March 1

The clock is ticking—tell your senators to repeal the SGR. With a 21 percent cut in Medicare physician payments scheduled to take effect in just 20 days, the time to persuade lawmakers to pass a permanent repeal of Medicare's sustainable growth rate (SGR) formula is ticking away. Contact your U.S. senators and insist that they pass legislation to repeal the SGR formula to avert the cuts, which are slated to take effect March 1. Use the AMA's toll-free grassroots hotline at (800) 833-6354 or write them an e-mail.

Senate Passes Health Reform Bill

In a 60-39 party line vote, the Senate passed the Patient Protection and Affordable Care Act in the morning on December 24.

Prior to the Senate vote, AMA President-elect Cecil B. Wilson, MD, announced the Association's backing during a Dec. 21 Capitol Hill appearance with Senate Majority Leader Harry Reid (D, Nev.) and other top Democrats. Dr. Wilson noted that the leaders had amended the bill to eliminate some earlier provisions that had prompted AMA concerns, such as a one-year Medicare pay patch that would have led to a projected 23% cut in 2011, an elective cosmetic surgery tax and a proposed Medicare enrollment fee.

But the AMA will continue to push for additional changes to the legislation during the conference negotiations. The Association, for instance, said it will not support a final House-Senate bill unless lawmakers make key revisions to: a proposed independent Medicare advisory board that could impose pay cuts on physicians, a plan to release Medicare data in the form of physician performance reports, and a requirement that doctors participate in Medicare quality reporting or face penalties.

In order to preserve AMA backing for the health system reform bill, the Association said Congress must also demonstrate that it is on track to approve separate legislation permanently repealing the Medicare physician payment formula before the current rate freeze expires at the end of February.

CMS Holds Claims and Extends Provider Enrollment

Last week Congress temporarily averted the 21.2% Medicare physician payment cut. On December 19, President Obama signed the bill which will stop the cuts until March 1, 2010. Other changes reflected in the 2010 Medicare Physician Fee Schedule final rule will still take effect on January 1, 2010 and may have a slight impact on the conversion factor used for the first two months of 2010. Similar to other years, since Congress acted so late in the year to avert the cut, CMS will hold claims for the first 10 business days of January (January 1 through January 15) for 2010 dates of service to allow its contractors time to update their systems and pay claims based on the updated rates CMS does not anticipate any cash flow problems for physicians since by law no claims are paid prior to 14 days after receipt anyway.

In addition, CMS has extended the 2010 Annual Participation Enrollment Program end date from January 31, 2010, to March 17, 2010. Physicians still have time to consider their participation options with the Medicare program. Additional information can be found on the AMA's web site. The effective date for any participation status change during this extension remains January 1, 2010, and will be in force for the entire year. Medicare contractors will accept and process any participation elections or withdrawals made during the extended enrollment period that are received or post-marked on or before March 17, 2010.

SGR Cut Temporarily Prevented

Yesterday the President has signed, a measure that extends the current Medicare physician payment rate for the next two months, thus blocking a 21.2 percent reduction that was scheduled to go into effect on Jan. 1 under the SGR formula.

The two-month payment patch, which was passed as part of a massive defense appropriations bill, gives lawmakers more time to replace the SGR payment formula.

House Votes to Delay SGR Cuts

This afternoon, the House passed a 2-month extension of expiring appropriations for the Department of Defense that included a 2-month extension of the sustainable growth rate (SGR). In other words, the legislation would stop the 21.2% Medicare pay cut scheduled take effect on January 1 for a period that will end March 1, 2010. The legislation does not affect any of the other payment policies included in the final 2010 fee schedule rule; those will take effect on schedule.

A cloture motion on the DoD extension bill was filed in the Senate today. Votes on cloture and passage should be completed this weekend.

House Repeals SGR

The AMA Bulletin below provides a good summary of the bill and House actions that led to passage.

By a vote of 243-183 today, the U.S. House of Representatives passed H.R. 3961, a bill that repeals the current Medicare physician payment formula, known as the sustainable growth rate (SGR), and replaces it with a new framework. Michael Burgess, MD, (R-Texas), a former AMA alternate delegate was the sole Republican to vote for final passage.

This legislation would replace the SGR with a new formula that creates two updates: GDP +2 for Evaluation and Management services and GDP + 1 for other services. Additional technical changes will avoid the accumulation or compounding of debt that occurred with the SGR formula.

House Speaker Nancy Pelosi (D-Calif.), House Majority Leader Steny Hoyer (D-Md.), House Committee on Ways and Means Chairman Charles Rangel (D-N.Y.), House Ways and Means Health Subcommittee Chairman Pete Stark (D-Calif.), House Committee on Energy and Commerce Chairman Henry Waxman (D-Calif.), Rep. Frank Pallone (D-N.J.), the bill's sponsor Rep. John Dingell (D-Mich.), and the Obama Administration were strong advocates for passage of H.R. 3961.

House Republican leadership offered a last-minute alternative that would have provided for 2 percent updates over the next four years, reverting back to the SGR and steep cuts. Also, it would have offset the cost with medical liability reforms modeled after California and Texas laws. The AMA opposed the motion to recommit because we do not support any temporary "patches" for the SGR. A permanent repeal is long overdue. The motion to recommit with medical liability reform provisions was ruled non-germane. A second GOP alternative providing for a two-year "patch" was defeated by a vote of 177-253.

The battle now shifts back to the Senate. While action to permanently repeal the SGR was blocked in the Senate last month, the Obama Administration and several senators support a permanent replacement of the SGR formula. The health system reform bill released by Senate Majority Leader Harry Reid (D-Nev.) provides for a one-year reprieve with a steeper cut in 2011. The AMA does not support temporary patches that further grow the problem.

No one expects Congress to allow the 21 percent cut scheduled for Jan. 1 to occur. We regret that Congress has deferred action until the "eleventh hour." The AMA will redouble our efforts in the Senate and with the Obama Administration to achieve a permanent solution.

Medicare Physician Payment Reform Act of 2009

Call your U.S. Representative today!

Next week, a floor vote is planned in the House of Representatives on H.R. 3961, the “Medicare Physician Payment Reform Act of 2009.” This legislation would permanently repeal the sustainable growth rate (SGR) formula that calls for annual cuts in Medicare physician payments, and replace it with a new, more rational payment system.

In less than two months, Medicare payments will be slashed by more than 21 percent because of the SGR formula. Past short-term patches have only made the problem worse. This is the time to solve the problem once and for all, to preserve access to care and provide physician practices with the financial stability they need to help build a 21st century health care system.

It is imperative that you contact your U.S. representatives today to ask that they vote for H.R. 3961.

Call (800) 833-6354, the AMA Grassroots Hotline, to be directly connected with your representative.

Tell your representative:
•Congress must fulfill its obligations to Medicare patients and military families covered by TRICARE.
•Short-term patches that only make future cuts deeper and the cost of a permanent solution more expensive are not the answer.
•The fiscally responsible solution is permanent repeal of the SGR formula.
•Vote “YES” on H.R. 3961.

Send an e-mail directly to your representative through the AMA Grassroots Action Center at www.ama-assn.org/go/grassroots.

AMA House of Delegates Committed to Health System Reform

As the House of Representatives passed a health reform bill this weekend, the AMA House of Delegates is holding its Interim Meeting in Houston. Delegates have introduced a number of resolutions related to health system reform. Some are supportive of current bills and measures, while others are critical. After lengthy testimony regarding health reform in reference committee hearings on Sunday, the HOD voted on Monday to reaffirm its committment to existing health reform policies in Substitute Resolution 203, maintaining support for H.R. 3962. View resources that show exactly which proposals are supported and opposed. 

AMA President J. James Rohack, MD noted, "H.R. 3962 is not the perfect bill, and we will continue to advocate for changes that help make the system better for patients and physicians as the legislative process continues." The AMA will continue to support H.R. 3961 to repair the broken Medicare SGR formula and keep pushing for liability reforms that will reduce the costs of defensive medicine.

House Passes Health Reform Bill

The U.S. House of Representatives passed a health reform bill Saturday night by a vote of 220-215.  The Affordable Health Care for America Act (H.R. 3962) makes many changes to the current health system. The key purpose of the bill is the expansion of health coverage to the uninsured and underinsured through subsidies financed by increasing taxes on high earners ($500,000 individual, $1,000,000 married filing jointly) and cutting costs in the current system. The Congressional Budget Office predicts the 10-year cost of these changes is $1.054 trillion. The bill does not make significant changes to medical liability laws or address the flawed Medicare SGR formula.

Senate leaders have been working to complete their own version of a health refrom bill that will be different from the House bill. If the Senate is able to pass a bill, then members from both chambers will have to reconcile the two different bills into a single bill that would then have to pass both chambers.

Vote on SGR

Wednesday's vote to limit debate and proceed to consideration of legislation (S. 1776) to repeal the SGR, erase the existing debt, and freeze physician payments at current rates for 10 years failed. This was a disappointing blow to physicians and supporters. A majority of senators from both parties agree the formula is flawed. The vote seems to have failed because (1) moderate senators who agree the SGR is a problem could not overlook the deficit implications and (2) Senate Republican leadership portrayed this as a test vote on Democrats' health reform legislation.

Unfortunately, temporary fixes that override the formula simply make the problem worse. In 2005 it would have cost $48 billion over 10 years to repeal the formula. Physicians that year faced cuts of 3.3%. Today it would cost $245 billion and the 2010 scheduled cut to physicians is 21.5%. Visit the Health System Reform website to stay current on this and other reform issues.

Medicare Physicians Fairness Act of 2009

Contact your senators in support of S. 1776. With the introduction in the U.S. Senate of S. 1776, the "Medicare Physicians Fairness Act of 2009," earlier this week, the AMA urges all physicians to contact their senators and tell them to support this critical piece of legislation that would eliminate Medicare's sustainable growth rate (SGR) formula.

S. 1776 will be the subject of a cloture vote in the coming days. The Senate needs 60 votes to invoke cloture to allow formal consideration of the bill. A vote on final passage is expected to occur late next week, either on Oct. 22 or 23. Senate Majority Leader Harry Reid (D-Nev.), Senate Finance Committee chairman Max Baucus (D-Mont.), and Sen. Chris Dodd (D-Conn.), along with President Barack Obama, are all strongly supporting passage of S. 1776.

Send an e-mail to your senator, or call the AMA grassroots hotline at (800) 833-6354 and be connected directly to your senators' offices. Learn more about S. 1776 in the latest edition of the AMA's Health System Reform Bulletin.