Deficit Reduction Act of 2005: 9-Day Payment Hold in September 2006

A brief hold will be placed on Medicare payments for all claims e.g., initial claims, adjustment claims and Medicare Secondary Payer (MSP) claims for the last nine days of the fiscal year September 22 - September 30, 2006, therefore, no payments on claims will be made during this time period. Providers who bill Medicare contractors fiscal intermediaries (FIs) and carriers for their services will be affected by this process.

Providers need to be aware of these payment delays, which are mandated by Section 5203 of the Deficit Reduction Act (DRA) of 2005. Accelerated payments using normal procedures will be considered. Interest will not be accrued or paid, and no late penalty will be paid to an entity or individual for any delay in a payment by reason of this one-time hold on payments. All claims held as a result of this one-time policy that would have otherwise been paid on one of these 9 days will be paid on October 2, 2006.

This policy applies only to claims subject to payment and does not apply to full denials, no-pay claims and other non-claim payments such as periodic interim payments, home health request for anticipated payments, cost reports settlements.

Furthermore, Medicare contractors will continue to apply the 14-day electronic claim payment floor and the 29-day paper claim payment floor. On a case-by-case basis, Medicare FIs, RHHIs or carriers can make adjustments after October 1, 2006 for explanatory circumstances raised by the provider. For example, adjustments may be made to not charge a provider interest on an overpayment for those days for which offsets could not be made due to the hold of payments required by this DRA provision.

Payments will not be spread out and no advance payments during the nine day hold will be allowed. CR5047 is the official instruction issued to providers’ FI, RHHI or carrier regarding changes. CR5047 may be found by going to CMS web site at: http://www.cms.hhs.gov/Transmittals/downloads/R944CP.pdf .

We would suggest that you consider this payment hold when projecting your cash flow for the month of September, especially those providers with 9/30 year ends. If you have questions or concerns about the impact on you, please contact us at (617) 742-7788 or via email at info@fdcpa.com and one of our Healthcare specialists will be happy to assist you and your organization respond to this act.

To contact Feeley & Driscoll, please click here or call us at 1 (888) 875-9770.