12.31.09 – Holding of Claims for Services Paid Under The 2010 Medicare Physician Fee Schedule

On December 23, 2009, the President has signed the Department of Defense Appropriations Act of 2010 which provides for a zero percent (0%) update to the 2010 Medicare Physician Fee Schedule for a two month period, January 1, 2010 through February 28, 2010.

In this regard, the Centers for Medicare & Medicaid Services CMS has instructed its contractors to hold claims for services paid under the Medicare Physician Fee Schedule (MPFS) for up to the first 10 business days of January (January 1 through January 15) for 2010 dates of service. This should have minimum impact on provider cash flow because, by law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt.  Meanwhile, all claims for services delivered on or before December 31, 2009, will be processed and paid under normal procedures.

The holding of claims allows Medicare contractors time to receive the new, updated payment files and perform necessary testing before paying claims at the new rates. CMS has instructed contractors to begin processing claims at the new rates no later than January 19, 2010.  Therefore, even absent a new update, most claims likely would not have been paid any sooner than January 19, 2010, given the aforementioned statutory 14-day payment floor.