Interim pay raise set to take effect Jan. 1 while legislators attempt permanent Medicare fee fix

Your practice is starting 2014 with yet another patch to the sustainable growth rate formula that has hampered Medicare payments to doctors for years. There is reason for cautious optimism this time, however, as the three-month pay fix is designed to give extra time to pass a permanent fix to the payment formula.

The three month temporary fix actually includes a 0.5% payment increase, which was passed by both houses of Congress by wide margins before the holiday break. President Obama has already signed the legislation into law.

What hasn’t happened yet is CMS has not yet released a new, temporary conversion factor for the first part of 2014, though some Medicare Administrative Contractors have published a new conversion factor of $35.8228. It’s also not yet clear if the pace of 2014 payments will be affected. There’s a good chance that Medicare contractors will be able to pay on time, as there is a 14-day freeze before the payment of clean claims anyway.

The 2014 conversion factor, once confirmed, is actually 5.2% higher than in 2013, despite the fix being only a 0.5% update. That’s because a series of other changes were made administratively by Medicare for 2014, including a re-basing of the weights applied to physician and practice expense relative values.

Those changes should mean a higher SGR, as it is increased to counter the lowered practice expense relative values.

Also extended until the end of March will be the minimum 1.0 work geographic price cost index floor, which is an additional payment boost for non-urban areas, as well as the therapy cap exceptions process. The automatic exception portion of the process will enable therapists to automatically request and receive an exception to just over $3,700 for each therapy cap – the one for physical and speech language therapy and the one for occupational therapy.

A manual review process would be in place for any therapy services above those amounts.