Important Message from CEO & Executive Director Sara Presler

Important Message from CEO & Executive Director Sara Presler

Advisory: Physicians face 26.5% reduction in Medicare reimbursement on January 1.

This winter, Congress adjourned without addressing the Sustainable Growth Rate (SGR) and the Medicare reimbursement cut will go into effect on January 1st. As a result of these matters being tied into the "Fiscal Cliff," reimbursements for physician services are facing a 26.5% cut in payments from Medicare for medical work done after January 1, 2013. In late December, the Centers for Medicare and Medicaid Services announced they will follow normal claims processing procedures regardless of action or inaction on the SGR. Therefore, claims will not be held and Medicare carriers will process payments for physician services provided after December 31 under the normal 14-day cycle required by law. Payment for these claims would be based on the new, lower fee schedule conversion factor of $25.0008, as opposed to the current rate of $34.0376. 

While we certainly hope a fiscal patch is found, Maricopa County Medical Society (MCMS) recommends all physician practices analyze the effect of this cut on their bottom line going forward. You will make the ultimate decisions regarding your practice and business.  One idea to consider is working with your accountant to create a profit and loss statement including the 26.5% reduction in Medicare. In the near to mid-term, some physicians are considering whether to accept new Medicare patients and others are making no changes to their practices. Other physicians are considering dropping Medicare as a provider. Each of these steps has complex legal, financial, and ethical dimensions.  There isn't one magic answer. At MCMS, we advise that you learn as much as possible about the SGR reduction and explore all of the choices before making a big decision that will affect your practice.  This change is coming quickly, and we are alerting you to it so that you may be best prepared to make important decisions.

The MCMS Board is meeting in January to continue to explore best practices for Practitioners and their offices and develop a forward strategy. MCMS is advising its Members to make plans to mitigate this disruption and work to continue to meet your financial obligations in 2013. ArMA is actively working on this important issue and has established banking relationships to help Members during this troubling situation that may be experiencing immediate cash flow concerns. MCMS advises its Members to be very careful about short term cash flow to fix a long term dilemma.

At MCMS, we recommend that you immediately notify your staff and patients so that they, too, may learn the best information to help with healthcare and medical treatment decisions. This may be a good time to explore new revenue or alternative revenue streams. Other recommendations include consulting with your accountant and request a profit and loss forecast for 2013 based on this changing payment percentage. Notify your billing staff to effectively measure the cuts and their impacts to your practice. Understanding your costs, overheads, gross profits, and taxation changes will assist you in making meaningful decisions about your business. Protect your patients, employees, and practice by developing a better understanding of your loss expectancy.

Stay tuned for a Webinar for Members in January 2013 that will provide updated information, accounting help, and policy recommendations related to SGR. We will post new information about this topic on this site and will remain engaged and watchful and send out E-Alerts if there are any urgent changes for you as we enter 2013. MCMS is working for you!

Respectfully yours,

Sara Presler
CEO & Executive Director
Maricopa County Medical Society