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TMA calculates impact of Medicare fee cut


Medicare payments to physicians dropped 2 percent on April 1 because of the fed- eral budget sequester. The Texas Medical Association’s Payment Advocacy Depart- ment analyzed the impact of the fee reduction and compiled a list of answers to questions you may have. Here is an example of how the fee cut would affect payment for a service with a


Medicare fee schedule amount of $100: Payment


Par Arrangement Physician


Non-Par/ Assigned


Total Payment 100% = $100 95% = $95 Rate


$76 Non-Par/ Unassigned


115% of $95 = $109.25


Amount From 80% of $100 = 80% of $95 = $0 Medicare Before $80 April 1


Payment From 20% of $100 = 20% of $95 = 80% of $95 ($76) Patient Before April 1


$20 $19 paid by Medicare


to patient + 20% of $95 ($19) paid by patient + $14.25 balance bill paid by patient


Amount From 80% of $100 Medicare After April 1


— 2% cut = $78.40


Payment From 20% of $100 Patient After April 1


= $20


80% of $95 — 2% cut = $74.48


$0


20% of $95 = 80% of $95 — 2% cut $19


($74.48) paid by


Medicare to patient + 20% of $95 ($19) + $15.77 balance bill paid by patient


Total Payment After April 1


$98.40 $93.48 $109.25


Q: Will CMS hold claims like it does when the fee schedule changes?


June 2013 TEXAS MEDICINE 11


Q: If I’m a Medicare-enrolled physi- cian who is non-par and doesn’t accept assignment, do I need to calculate the 2-percent cut off what I collect from the patient? A: No. You will continue collecting the same amount as you did before. Your patients will see the cut taken on the amount Medicare reimburses them; thus, you may receive questions from them.


Q: Has CMS applied the fee reduction to claims processed starting April 1? What if I have a claim from March that hadn’t been paid yet? A: CMS will apply the cut to claims with a date of service of April 1 or later. CMS will pay claims from January through March at the posted fee schedule amount without a 2-percent reduction.


Q: Will this cut also impact my payment from Medicare Advantage plans? A: Possibly. It depends on your contract. If you are out of network with a plan and it pays claims based on the 2013 Medicare Fee Schedule, you will see the 2-percent cut reflected on your payment.


Frequently asked questions Q: Can I pass on the 2-percent cut to my patients and collect it from them? A: No.


Q: When will the Centers for Medicare & Medicaid Services (CMS) post an up- dated 2013 fee schedule based on the 2-percent cut? A: CMS will not post an updated 2013 fee schedule. The fee schedule you use for 2013 will remain the same.


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