What You Need to Know to Submit Medicare Claims Starting July 1

June 30, 2008


Since the US Senate failed to consider legislation to stop the Medicare physician payment cuts, a 10.6 percent Medicare payment cut has gone into effect beginning July 1. Physicians should be aware of their new options for submitting claims.

For services provided July 1 and after, physicians have these options to choose from for submitting claims:

  • Submit claims to Medicare with the prior (pre-July 1) fee schedule amount. If Congress acts to retroactively fix the fee schedule, providers would not have to resubmit these claims. Medicare can automatically reprocess the claims at the higher amount if Congress enacts a retroactive fix. Practices cannot legally charge beneficiaries 20 percent of the previous fee schedule amount. Practices may either wait and charge beneficiaries the copay later, or charge a copay at 20 percent of the new, lower fee schedule amount.
  • Hold the claim in your office until Congress acts (possibly by mid-July) so the physician knows the correct amount to remit to Medicare and the appropriate copay to charge the beneficiary. Practices will have to determine if they have the cash flow to accommodate this.
  • Submit claims to Medicare with the new, lower fee schedule amount and charge beneficiaries the 20 percent copay. If Congress acts to retroactively fix the fee schedule, practices will have to resubmit those claims to Medicare and re-bill beneficiaries for the difference in their copay. The Centers for Medicare & Medicaid Services (CMS) are required by law to pay the lower of the submitted charges or the Medicare fee schedule amount on a claim.

CMS has instructed contractors to hold claims for the first 10 business days of July, anticipating that if new legislation is passed by mid-July, there should be minimal disruption in payments to providers.

Physicians should consult their contractor or carrier’s website for appropriate fee schedule amounts.

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Senate Fails to Act; 10.6 Percent Medicare Payment Cut Going into Effect on July 1