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Medicare rate cut temporarily takes effect

Physician Practice Advisor, January 11, 2006

CMS released guidelines for the new Medicare physician fee schedule, which includes a 4.4% rate cut, after Congress failed to finalize the Deficit Reduction Act that would have avoided the cuts. The House and Senate initially passed the legislation, however, due to differences on unrelated matters within the bill Congress failed to sign the measure into law before going on break.

Although Congress is expected to pass the legislation-and freeze Medicare rates at their 2005 levels-when it reconvenes after January 31 the rate cut went into effect at the first of the year. In a letter to lawmakers, CMS Director Herb Kuhn said that, once the Deficit Reduction Act legislation has been enacted, the program will issue instructions to contractors concerning processing and reprocessing of claims to reflect the new law.

Kuhn's letter also said Medicare contractors will be instructed to automatically reprocess claims that were already processed and that reflected the 4.4% cut in 2006 payments.