ALERT: Physician Payment "Fix" and TC Grandfather Clause Both Extended Through 2/29/2012
ALERT: PHYSICIAN PAYMENT UPDATE & TC GRANDFATHER CLAUSE EXTENDED THROUGH 2/29/2012
On December 23, 2011, the Temporary Payroll Tax Cut Continuation Act of 2011 was signed into law by President Obama, avoiding the immediate crisis faced by physicians with a pending 24.7% fee schedule cut and Pathology TC Grandfather Clause expiration on the horizon at the end of 2011. With this extension, physicians will neither see an increase nor decrease to their fees through February 29, 2012.
The Pathology TC Grandfather Clause was also spared with the signing of this Act. This Clause affects “grandfathered” hospitals where the hospital outsources basic technical component (i.e., histology) to a third party laboratory; the third party then bills Medicare directly for the services rendered. If this Clause were to expire, the hospitals would have to bill Medicare directly, meaning the laboratories would have to bill the hospitals.
At this point, the Clause is set to expire February 29, 2012. At that time, laboratories may no longer bill Medicare for TC services for patients with dates of service February 29, 2012 and beyond. Laboratories are encouraged to approach their hospital clients to advise them of this upcoming expiration date and begin potential negotiations for billing the laboratory for the TC (client bill). In situations where the laboratories client-bill the hospitals, there will not be any change necessary.
Please contact PIMS with any questions or concerns regarding how this may affect your practice, hospital, and/or laboratory. We can analyze your arrangements to see whether any will be affected by this potential expiration and can help with communication to your business partners and/or hospitals regarding same.
Jessica S. Cohen, Esquire, In-House Counsel
Jessica S. Cohen is the in-house counsel for Physicians Independent Management Services, Inc. She specializes in health law and negotiates managed care contracts, employment agreements, and other pathologist and laboratory specific matters.