The Medicare program has been, essentially, sitting on Medicare claims in order to give lawmakers more time to pass certain extensions. Unfortunately, the program cannot continue to do that indefinitely. The backlog of claims could be more than the program can actually handle.
This whole situation has a longer history than you might be aware of. During the Spring and Summer of 2010, there was a situation that has been referred to as the “Medicare doc fix”. At that time, there was the potential that doctors and hospitals would face a 21% cut on their reimbursement for treating Medicare payments.
Back then, Congress missed the deadline. They were unable, (or unwilling), to cooperate with each other enough to agree to something that would have extended that deadline. So, the Centers for Medicare and Medicaid Services decided to, essentially, “sit on” Medicare claims for a while, in order to give Congress more time to get their act together and extend the deadline that would prevent the 21% cut from becoming a reality.
The delay lasted several months, but, eventually, Congress was able to come to an agreement, and the 21% cut to Medicare reimbursements didn’t happen. Once that was settled, the Medicare program was able to start processing those backlogged claims.
Now, we are once again watching a gridlocked Congress that seems unable, (or unwilling), to come to an agreement that will prevent a cut to the reimbursements that hospitals and doctors get for treating Medicare patients. This time, it will be a 27% cut, (unless Congress finds some way to just get along).
This time, however, the Medicare program cannot simply put off processing claims indefinitely, like they did the last time Congress was dragging its collective feet about getting things done. This is for several reasons.
The first problem is that there is no way to know, for certain, exactly when Congress will come to an agreement that will prevent the 27% cut. According to Jonathan Blum, who is the deputy administrator of the Centers for Medicare and Medicaid Services, when they held back claims for an extended period in 2010, it nearly crashed the entire system. It is not possible to attempt to hold back claims today.
Another problem is that when the Centers for Medicare and Medicaid Services held back claims last time, they got quite a bit of negative feedback from doctors. The doctors, especially the ones who are in smaller practices, would very much prefer to have some payment coming from the Medicare program, instead of none at all, while Congress tries to sort itself out. It is hard for doctors to be able to continue running their businesses without any payment for treating Medicare patients.
Right now, Medicare is allowed, (and able to), hold back payments for ten business days. That would put the date at which the Medicare program begins processing claims again at January 18, 2011. That just so happens to be the exact same date that the Senate is scheduled to come back from their holiday vacation.
Image by Phil Roeder on Flickr