Medicare to hold nine days' worth of providers' pay

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ASSOCIATED PRESS

Many health care providers will have to make do next month without a government paycheck or two.

The Bush administration says it will not make any Medicare reimbursements to hospitals, doctors and scores of other providers during the final nine days of the current budget year, from Sept. 22 to 30. Congress ordered the hold.

The providers taking care of older people and the disabled will get paid in full after the new budget year begins Oct. 1. They should not count on any interest on the amount owed.

Dr. Arthur Wise, a plastic surgeon in New York's Long Island, and others are not happy about it. Dr. Wise says the hold is unfair and underhanded.

"Obviously, none of our suppliers, our renters or our malpractice insurers are saying, 'Hey, we know you're not going to get paid for nine days of September, so don't bother sending us a check,'" Dr. Wise said.

For most hospitals, nursing homes and others, the hold will serve more as a frustration than a financial strain, said Chris Jennings, a health policy analyst who used to work in the Clinton administration.

"I think they get frustrated with these games, but I think they'll survive," Mr. Jennings said. "It's just another game, another burden they don't want to bear."

By delaying payments, the government moves $5.2 billion in Medicare expenses to next year's budget.

"The alternative was to cut reimbursements to providers this year. With this payment shift, we avoid that cut," Senate Finance Committee spokeswoman Jill Kozeny said.

A Medicare "holiday" has been approved at least twice before, in the early 1980s, she said. In one of those cases, it was repealed before the holiday could take effect.

Herb Kuhn, director of the Center for Medicare Management, said health care providers have been warned that they will not get paid near the end of September. He also said he has heard no complaints.

"For a lot of them, it should be pretty seamless," he said. "It may affect some of their cash flow, but won't affect it significantly."

At the American Medical Association's annual meeting, doctors in New York introduced a resolution stating that because they do not get a "financial responsibility holiday," the hold should be repealed.

The resolution did not muster enough votes to pass. A bigger concern to the organization was Medicare's reimbursement rates for physicians. The legislation that included the hold on Medicare payments also did away with about a 4.4 percent cut in reimbursement rates scheduled for this year.