On March 1, 2010, a 21.2% across-the-board cut in Medicare physician fee schedule (MPFS) payments went into effect under the statutory sustainable growth rate (SGR) formula. While Congress had temporarily blocked the cut and maintained rates at 2009 levels for the first two months of 2010, that authorizing legislation expired February 28, 2010. Lawmakers are working to implement a fee schedule fix as part of job promotion legislation, but while the details of the bill and the timing for enactment still are uncertain, action in the next week is anticipated with reports that extension of the freeze may be continued until September 30, 2010. In the meantime, CMS has instructed its contractors to hold for the first 10 business days of March MPFS claims with dates of service on or after March 1, 2010. According to CMS, the hold should have a minimum impact on provider cash flow, since current law provides that clean electronic claims are not paid before 14 calendar days (29 for paper claims) after the date of receipt.

** March 3 update: In light of Congressional passage of a one-month extension of the physician fee schedule fix, CMS announced it has lifted the hold on MPFS claims.