Everyone in the medical billing field is hopeful that Congress will act to defer (and ultimately eliminate) the proposed 21% fee reduction for Medicare. Keep in mind, however, that March 2010 collections will likely suffer a delay even if the fee cut is deferred. The coming months will be a challenging time for medical practices and medical billing companies.
In January 2010 Medicare had a 2 to 3 week delay in processing claims because they needed to update their system after Congress deferred the 21% Medicare fee reduction. As of today, Medicare is still catching up in their claims processing (a fact that have not officially acknowledged). ClaimCare found that as of February 23, 2010, Medicare was still at least a week behind in their typical claim processing time frame. And this level of a delay happened when Medicare had plenty of advance warning concerning the deferral, so you can imagine what delays could result when they have less advance notice. In addition to this delay, Medicare had a system problem that resulted in multiple weeks worth of secondary claims not crossing over properly. This Medicare system problem has compounded the delay in collections.
There is every reason to expect another delay in Medicare payments in March 2010 if Congress issues a last-minute deferral of the 21% fee reduction. Based upon past evidence and experience, if Congress does issue a deferment, we anticipate a 2 to 3 week delay in the Medicare claims processing and payments. Therefore, when thinking about your cash flow for March 2010, you should plan for at least an additional 2 to 3 week delay for Medicare payments.
If Congress decides to delay the fee reduction for only 30 to 45 days (as they are considering), then this problem will be repeated and exacerbated in April if they pass yet another last-minute deferral. Practices and medical billing companies need to plan on Medicare collections being less predicable and fairly erratic over the next few months. As I stated earlier, this is a challenging time to be a medical practice or a medical billing company.